Abstract
This article analyzes economic and environmental impacts of selected scenarios in the transport field using neoclassical methodology. The paper reports about a microeconomic model of transport behavior of households and public transport agencies; this model is calibrated and simulated for five largest cities in the Czech Republic.
The results of simulations of different scenarios are discussed. Model simulations suggest that the increase in the excise tax on fuels seems to be the best option to regulate air pollution externalities.
In cities, where operation costs of public transport are significantly subsidized, this tool should be accompanied with a fare increase as well, because of costs of public funds. A decrease in fares is not likely to be welfare improving because of small induced modal split and high requirements of public funds needed to cover such policy.