Fundamentals of Transportation/Planning

Urban, city, and town planning integrates land use planning and transportation planning to improve the built, economic and social environments of communities. Transportation planning evaluates, assesses, designs and sites transportation facilities.
There are two approaches to planning
Both are typically undertaken. In land markets, the first is often the case. In transportation, which is often government provided, the second often holds.
Rationales for Planning.
Why plan transportation?
Transportation is, for better or worse, a public enterprise with long lasting consequences for decisions. There exist economies of coordination which may (but not necessarily) be difficult to achieve in the absence of planning. For instance, we want to ensure that roads from two different counties meet at the county line.
Why plan land use?
Owners of developed land have a right to service from public and private infrastructure. As infrastructure is costly and the economics of financing it are crude (though they need not be), planning is a substitute for the market.
Plans help order and regulate land use in an efficient and ethical way, thus preventing land-use conflicts. Governments use land-use planning to manage the development of land within their jurisdictions
Economic rationales.
To invoke microeconomic theory:
In a market, equilibrium (formula_1, formula_2) occurs where marginal private cost equals marginal willingness to pay or demand. However if there are externalities, costs that are not borne by the parties to the transaction (e.g. noise pollution, air pollution, and congestion), there is a marginal social cost that is higher than the marginal private cost, leading to overconsumption. The first best solution is to price goods at their marginal social cost, imposing an additional charge. However, the same effect can be achieved by establishing a restrictive quota on demand (formula_3).
There are other approaches to the problem besides directly increasing taxes or restricting demand. The libertarian approach for instance is the use of lawsuits, and fear thereof, to bring about good behavior. If you create a nuisance for your neighbors, they could sue you and the courts could force you to behave better. This shifts the problem from legislators and bureaucrats to judges and juries, which may or may not be an improvement. However, while this is easy to do for some kinds of obvious nuisances, it poses more problems for widely distributed externalities like air pollution.
The favored transportation economist solution to congestion is road pricing, charging a higher toll in the peak to provide the right price signal to commuters about their true costs. More radical solutions include road privatization. The central issue with most externalities is the lack of well defined property rights:
Ronald Coase (1992) argues that the problem is that of actions of economic agents have harmful effects on others. His theorem is restated from George Stigler (1966) as "... under perfect competition, private and social costs will be equal." This analysis extends and controverts the argument of Arthur Pigou (1920), who argued that the creator of the externality should pay a tax or be liable, what is now called "The Polluter Pays Principle". Coase (1992) suggests the problem is lack of property rights, and notes that the externality is caused by both parties, the polluter and the receiver of pollution. In this reciprocal relationship, there would be no noise pollution externality if no-one was around to hear. This theory echoes the Zen question ``If a tree falls in the woods and no-one is around to hear, does it make a sound?". Moreover, the allocation of property rights to either the polluter or pollutee results in a socially optimal level of production, because in theory the individuals or firms could merge and the external cost would become internal. However, this analysis assumes zero transaction costs. If the transaction costs exceed the gains from a rearrangement of activities to maximize production value, then the switch in behavior won’t be made.
There are several means for internalizing these external costs. Pigou identifies the imposition of taxes and transfers, Coase (1992) suggests assigning property rights, while government most frequently uses regulation. To some extent all have been tried in various places and times. In dealing with air pollution, transferable pollution rights have been created for some pollutants. Fuel taxes are used in some countries to deter the amount of travel, with an added rationale being compensation for the air pollution created by cars. The US government establishes pollution and noise standards for vehicles, and requires noise walls be installed along highways in some areas.
Legal rationales (United States).
Bruce Spear has written regarding planning:
Property rights.
Government in general, and land use planning in particular, concerns itself with restricting individual property rights for the common good. Donald Krueckeberg (1995) cites Christman who defines 9 separable kinds of property rights: 
Some quotes about property and government:
Problems in urban land markets.
Whitehead identifies a number of problems in urban land markets.
Arrow's Impossibility Theorem
An illustration of the problem of aggregation of social welfare functions:
Three individuals each have well-behaved preferences. However, aggregating the three does not produce a well behaved preference function:
Aggregating, transitivity is violated.
What does society want? How would a planner resolve this paradox?
Thought questions.
Is there a right to be free of pollution, noise, or nuisance of various kinds?
Which of the following statements is more accurate:
Discussion Questions.
Do community decisions require government decisions? To what extent does planning require government? For instance, Columbia, Maryland was largely private sector (with some public provided goods).
Can private arrangements substitute for government mandates? Privatopias, covenant arrangements, etc.
What would transportation look like without land use planners and their plans?
Using the rationales for planning, justify:
How is planning done.
The remainder of this unit in the wikibook "Fundamentals of Transportation" concerns not whether planning should be undertaken, but how it is done, ideally and in practice. Sections include: