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A political economy model of road pricing

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  • De Borger, Bruno
  • Proost, Stef

Abstract

In this paper, we use a simple majority voting model to study the introduction of urban congestion tolls. The model allows for different types of uncertainty and considers different uses of the toll revenues. The following results are obtained. First, we show that individual uncertainty with respect to modal substitution costs may imply that a majority votes against road pricing ex ante, although a majority would have been in favor after its introduction ex post. Moreover, if a majority is against road pricing ex ante, there will also be no majority for organizing an experiment that would take away the individual uncertainty. Second, political uncertainty with respect to the use of the revenues corroborates the finding that ex ante more voters will be against the introduction of tolls. Third, both types of uncertainty suggest that fewer voters are against road pricing when toll revenues are used to subsidize public transport than when they are redistributed to all voters. Importantly, the results of this paper are consistent with a number of recent empirical observations on efforts to introduce road pricing, including the systematic rejection of road pricing in referenda, the more favorable attitudes towards road pricing after than before its introduction, and tying the toll revenues to support public transport.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 71 (2012)
Issue (Month): 1 ()
Pages: 79-92

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Handle: RePEc:eee:juecon:v:71:y:2012:i:1:p:79-92

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Web page: http://www.elsevier.com/locate/inca/622905

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Keywords: Policy reform; Road pricing; Majority voting;

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References

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Why road pricing is so difficult to impose
    by Economic Logician in Economic Logic on 2010-08-24 14:14:00
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Cited by:
  1. DE BORGER, Bruno & PROOST, Stef, 2013. "The political economy of pricing and capacity decisions for congestible local public goods in a federal state," Working Papers, University of Antwerp, Faculty of Applied Economics 2013020, University of Antwerp, Faculty of Applied Economics.
  2. Mogens Fosgerau & André De Palma, 2012. "The dynamics of urban traffic congestion and the price of parking," Working Papers, HAL hal-00742104, HAL.
  3. Hensher, David A. & Li, Zheng, 2013. "Referendum voting in road pricing reform: A review of the evidence," Transport Policy, Elsevier, Elsevier, vol. 25(C), pages 186-197.
  4. David Hensher & Corinne Mulley, 2014. "Complementing distance based charges with discounted registration fees in the reform of road user charges: the impact for motorists and government revenue," Transportation, Springer, Springer, vol. 41(4), pages 697-715, July.
  5. Fosgerau, Mogens & de Palma, André, 2013. "The dynamics of urban traffic congestion and the price of parking�," MPRA Paper 48433, University Library of Munich, Germany.
  6. Russo, Antonio, 2012. "Voting on Road Congestion Policy," TSE Working Papers, Toulouse School of Economics (TSE) 12-310, Toulouse School of Economics (TSE), revised Nov 2012.
  7. DE BORGER, Bruno & PROOST, Stef, 2012. "Transport policy competition between governments: A selective survey of the literature," Working Papers, University of Antwerp, Faculty of Applied Economics 2012014, University of Antwerp, Faculty of Applied Economics.

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