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The Problem of Road Congestion: The Futility of 'Avoidable Cost' Estimates

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  • Mark Harrison

Abstract

The Bureau of Infrastructure, Transport and Regional Economics estimates of the costs of road congestion in Australian capital cities ($9.4 billion in 2005 and projected to more than double by 2020) are widely cited. But these projections appear to overstate the problem and provide little, if any, guidance for sound policy development. They are not measures of the net gain from introducing congestion charging. Moreover, such numbers provide no help for evaluating the net benefits of other policies to deal with congestion, such as increasing road capacity. Without efficiency-based cost-benefit analysis of all policies to deal with road congestion, governments run the risk of lowering social welfare.

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  • Mark Harrison, 2012. "The Problem of Road Congestion: The Futility of 'Avoidable Cost' Estimates," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 19(2), pages 77-88.
    • Handle: RePEc:acb:agenda:v:19:y:2012:i:2:p:77-88
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    References listed on IDEAS

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    1. Eliasson, Jonas, 2008. "Lessons from the Stockholm congestion charging trial," Transport Policy, Elsevier, vol. 15(6), pages 395-404, November.
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