Ricardian Model of Comparative Cost Advantage in Operating Intercity State Transport Corporation (ISTC) and Opoku-Agyemang (O.A) Travel and Tour

Abstract

This study employed the Ricardian Model of Comparative Cost Advantage, the study was able to relate to how much productive or cost efficient one transport corporation is than the other. In this case, the research centered on how much one transport provider is efficient in a particular service than the other and therefore can tell which transport corporation should resort to specializing in human transport and leave parcel transport service and vice versa due to high patronage.  Stratified sampling was used to divide the population into homogeneous subgroups (Bosco training Collage, UDS Navrongo Campus, OA bus terminal and ISTC bus terminal). Structured questionnaire was design and administered to generate precise and accurate information on the effectiveness of Intercity State Transport Coaches ltd (ISTC) and Opoku Agyeman travel and tour (O.A) in terms of human transport and parceling services. The study revealed that O.A, is a private enterprise that is time conscious in terms of delivery. ISTC on the other hand specializes in safety. From the research, the cost of transporting humans from Bolgatanga to Kumasi and vice versa was lower for O.A than ISTC and this allows most customers to prefer O.A to ISTC. However, the affordability of charges of parcels moving from Kumasi to Bolgatanga and vice versa is better in ISTC than O.A. This gives O.A a comparative cost advantage in terms of human transportation than ISTC. ISTC however has a comparative cot advantage over O.A in parceling service.

Keywords: Ricardian Model, Comparative Cost Advantage, Opportunity Cost Theory, Productive Possibility Frontier, Transportation.

DOI: 10.7176/JESD/11-4-03

Publication date: February 29^th 2020