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After nearly 20 years teaching at The University of Western Australia Business School , Winthrop Professor John Taplin will retire at the end of the year. That doesn't, however, mean that he'll be retiring to a quiet life. From the beginning of 2011, John will take up the position of emeritus professor, and here he talks candidly about his time at UWA, his work in the area of transport and the challenges of initiating the Mandurah railway line.

From bureaucracy to academia

Before arriving at UWA, Professor Taplin spent several decades in the senior bureaucracy. This included time as the Director General of Transport WA, Deputy Secretary of the Australian Department of Transport, and Director of the Bureau of Transport Economics. So what prompted the shift into academic life?

‘I was a senior bureaucrat and came here [UWA] more or less by accident,' explains Taplin. ‘I had been consulting in China, and when I came back here it was interesting to try and match my public service policy making experience to economic theory and analysis. It is a favourite topic of mine, the value of people moving between the academic world and the bureaucracy, because in the bureaucracy you use economic theory a lot. So it's interesting to come out of there and into the academic world.

‘I once had the curious experience of being told by the Solicitor General of Western Australia that the goals that economists have don't always get reflected properly in legislation. For example, the Trade Practices legislation has often produced almost the opposite result of what the economists intended for this law.'

Taplin saw this ‘opposite effect' first hand, when the legislation resulted in a reduction in the efficiency of Western Australia's freight transport system. ‘As Director General of Transport, I was responsible for the state railway, and it was the state railway that was involved [in the court case], competing with a big road operator,' he recalls. ‘A railway prices its services in a different way to what a trucking company does, and it can be profitable to offer a service at a little above direct cost. Although this is economically beneficial, the opposing lawyers argued in court that it was unfair to not offer the service at full cost. In the end we had to give in. The railway had to put its charges for freight transport up, and it gave the trucking operator the opportunity to take a bigger share, which wasn't good for wheat growers.'

More than intelligent guesswork

Once Taplin arrived in the world of academia, however, his attention turned to applied economics. He counts his greatest achievement as the supervision of some outstanding PhD students, including Min Qiu, who is now an associate professor at the Business School.

‘They [the PhD students] achieved a breakthrough in optimising future road investment by using genetic algorithm,' explains Taplin. ‘It [the algorithm] is a mathematical search technique that is more flexible than previous methods. Previously, optimum investment [in road transport] had always been intractable. The investment had been intelligent guesswork and had failed to take into account extremely complex interactions, particularly traffic interactions. The trouble is that drivers will make up their own minds, and you have to model that and search all the possible combinations - it's extremely difficult.'

The genetic algorithm developed by UWA researchers is now used in a range of industries. ‘Genetic algorithm is used for finding a very good (not the best) solution and is reliably good,' says Taplin. ‘It could be used for planning new roads, or optimising paper cutting in a paper mill, where the task of minimising waste is extremely difficult.'

The breakthrough

Taplin's research with students in the area of choice modelling has proved just as influential. Whenever commuters are given a choice - for example, between ethanol and LPG, or between bus, train and car - a variety of factors such as convenience, price, and time, will influence their decision. The problem that transport planners face is being able to accurately predict levels of demand for each option.

Researchers use stated choice questionnaires, in which people are presented with a series of slightly varied scenarios and repeatedly asked to choose one. Their pattern of choices is then used to generate choice elasticities.  In economic terms, elasticity can be viewed as the ratio of the percentage change in one variable measured against the percentage change in another variable. Choice elasticities therefore measure the rate of change in people's choices when variables such as price or convenience are changed.

It was nearly thirty years ago when Taplin made his first major breakthrough in the area. ‘I discovered in 1982 how to go from demand to choice elasticities,' he recalls.  ‘But the problem with choice elasticities is that they don't tell you how the market will move. So we then had the more difficult task of turning choice estimates into demand elasticities to see what the response will be in the market.'

That problem has now been solved and choice elasticities can be turned into demand elasticities, allowing planners to model the changes in demand that will occur when the cost of a service is altered.

Not until this year, however, did Taplin and his co-researchers, including Brett Smith, discover how to move from demand elasticities back to choice elasticities. The paper has recently been published, and the benefits will continue to flow for many years.

Join us for part two of our exclusive interview with Professor Taplin , when he talks about the challenges of building the Mandurah railway and his vision for Perth's transport system into the future.

Media references

Heather Merritt
Director, External Relations
UWA Business School
T: +618 6488 8171
E: [email protected]

Verity Chia
Communications Officer
UWA Business School
E: [email protected]