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Equity effects of congestion pricing: Quantitative methodology and a case study for Stockholm

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  • Eliasson, Jonas
  • Mattsson, Lars-Göran

Abstract

It is widely recognised that congestion pricing could be an effective measure to solve environmental and congestion problems in urban areas--a reform that normally also would generate a net welfare surplus. Despite this the implementation of congestion pricing has been very slow. One reason for a low public and political acceptance could be that equity impacts have not been given enough concern. In studies of distributional impacts of congestion pricing it has often been claimed that the reform is regressive rather than progressive even if there are studies claiming the opposite. We develop a method for detailed, quantitative assessment of equity effects of road pricing and apply it to a real-world example, namely a proposed congestion-charging scheme for Stockholm. The method simultaneously takes into account differences in travel behaviour, in preferences (such as values of time) and in supply of travel possibilities (car ownership, public transport level-of-service etc.). We conclude that the two most important factors for the net impact of congestion pricing are the initial travel patterns and how revenues are used. Differences in these respects dwarf differences in other factors such as values of time. This is accentuated by the fact that the total collected charges are more than three times as large as the net benefits. With respect to different groups, we find that men, high-income groups and residents in the central parts of the city will be affected the most. If revenues are used for improving public transport, this will benefit women and low-income groups the most. If revenues are used for tax cuts, the net benefits will be about equal for men and women on the average, while it naturally will benefit high-income groups. Given that it is likely that the revenues will be used to some extent to improve the public transport system, we conclude that the proposed congestion-charging scheme for Stockholm is progressive rather than regressive.

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Bibliographic Info

Article provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.

Volume (Year): 40 (2006)
Issue (Month): 7 (August)
Pages: 602-620

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Handle: RePEc:eee:transa:v:40:y:2006:i:7:p:602-620

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Cited by:
  1. Harsman, Bjorn & Quigley, John M., 2010. "Political and Public Acceptability of Congestion Pricing: Ideology and Self Interest," University of California Transportation Center, Working Papers qt14n0h1nv, University of California Transportation Center.
  2. Daniel Albalate & Germa Bel, 2008. "Shaping urban traffic patterns through congestion charging: What factors drive success or failure?," IREA Working Papers 200801, University of Barcelona, Research Institute of Applied Economics, revised Jan 2008.
  3. David Heres & Steffen Kallbekken & Ibon Galarraga, 2013. "Understanding Public Support for Externality-Correcting Taxes and Subsidies: A Lab Experiment," Working Papers 2013-01, BC3.
  4. Ida Kristoffersson & Leonid Engelson, 2011. "Modifications of the Stockholm congestion pricing scheme and effects on different user groups," ERSA conference papers ersa10p1455, European Regional Science Association.
  5. Leonid Engelson & Ida Kristoffersson & Mohammad Saifuzzaman & André De Palma & Kiarash Motamedi, 2013. "Comparison of two dynamic transportation models: The case of Stockholm congestion charging," Working Papers hal-00779285, HAL.
  6. Kallbekken, Steffen & Sælen, Håkon, 2011. "Public acceptance for environmental taxes: Self-interest, environmental and distributional concerns," Energy Policy, Elsevier, vol. 39(5), pages 2966-2973, May.
  7. Sclen, Håkon & Kallbekken, Steffen, 2011. "A choice experiment on fuel taxation and earmarking in Norway," Ecological Economics, Elsevier, vol. 70(11), pages 2181-2190, September.
  8. Jonas Westin, 2011. "Labor Market Effects of Road Pricing in a Population with Continuously Distributed Value of Time," ERSA conference papers ersa10p1458, European Regional Science Association.
  9. Börjesson, Maria & Eliasson, Jonas & Hugosson, Muriel & Brundell-Freij, Karin, 2012. "The Stockholm congestion charges – five years on. Effects, acceptability and lessons learnt," Working papers in Transport Economics 2012:3, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
  10. King, David & Manville, Michael & Shoup, Donald, 2007. "The political calculus of congestion pricing," University of California Transportation Center, Working Papers qt9js9z8gz, University of California Transportation Center.
  11. Kallbekken, Steffen & Aasen, Marianne, 2010. "The demand for earmarking: Results from a focus group study," Ecological Economics, Elsevier, vol. 69(11), pages 2183-2190, September.
  12. Timilsina, Govinda R. & Dulal, Hari B., 2008. "Fiscal policy instruments for reducing congestion and atmospheric emissions in the transport sector : a review," Policy Research Working Paper Series 4652, The World Bank.

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