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Willingness to spend and road pricing rates

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  • Ferrari, Paolo
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    Abstract

    Using a theoretical model of urban transport system the paper examines the influence of distribution of willingness to spend within the urban population on road pricing rates. It shows that the rates that must be imposed in an urban area in order to maintain pollutant concentration and congestion due to traffic within acceptable levels is heavily dependent on the distribution of the urban population's willingness to spend. This fact severely limits the reliability of any method for calculating road pricing rates based on theoretical analysis, so that an experimental approach seems necessary. The paper shows that a relation exists between the toll rate per kilometer of trip and the average traffic congestion, which is typical of each urban area and can be determined experimentally by successively imposing three different rates and measuring the corresponding congestion levels. The relation can then be used to determine the pricing scheme when the purpose of road pricing is to maintain both the congestion and the environmental effects due to urban traffic below acceptable thresholds. An example shows how the model can help policymakers in decision-making processes.

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    Bibliographic Info

    Article provided by Elsevier in its journal Transport Policy.

    Volume (Year): 17 (2010)
    Issue (Month): 3 (May)
    Pages: 160-172

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    Handle: RePEc:eee:trapol:v:17:y:2010:i:3:p:160-172

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    Related research

    Keywords: Urban transport system Road pricing Willingness to spend Congestion level Environmental effects;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
    2. Bell, Michael G. H., 1995. "Stochastic user equilibrium assignment in networks with queues," Transportation Research Part B: Methodological, Elsevier, vol. 29(2), pages 125-137, April.
    3. Hess, Stephane & Bierlaire, Michel & Polak, John W., 2005. "Estimation of value of travel-time savings using mixed logit models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(2-3), pages 221-236.
    4. Yang, Hai & Huang, Hai-Jun, 1998. "Principle of marginal-cost pricing: how does it work in a general road network?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(1), pages 45-54, January.
    5. Yang, Hai & Meng, Qiang & Lee, Der-Horng, 2004. "Trial-and-error implementation of marginal-cost pricing on networks in the absence of demand functions," Transportation Research Part B: Methodological, Elsevier, vol. 38(6), pages 477-493, July.
    6. Ferrari, Paolo, 1995. "Road pricing and network equilibrium," Transportation Research Part B: Methodological, Elsevier, vol. 29(5), pages 357-372, October.
    7. Hau, Timothy D., 1992. "Economic fundamentals of road pricing : a diagrammatic analysis," Policy Research Working Paper Series 1070, The World Bank.
    8. Yang, Hai & Bell, Michael G. H., 1997. "Traffic restraint, road pricing and network equilibrium," Transportation Research Part B: Methodological, Elsevier, vol. 31(4), pages 303-314, August.
    9. Ferrari, Paolo, 1997. "Capacity constraints in urban transport networks," Transportation Research Part B: Methodological, Elsevier, vol. 31(4), pages 291-301, August.
    10. David Hensher, 2001. "The valuation of commuter travel time savings for car drivers: evaluating alternative model specifications," Transportation, Springer, vol. 28(2), pages 101-118, May.
    11. Ferrari, Paolo, 2005. "Road pricing and users' surplus," Transport Policy, Elsevier, vol. 12(6), pages 477-487, November.
    12. Gaudry, Marc J. I. & Jara-Diaz, Sergio R. & Ortuzar, Juan de Dios, 1989. "Value of time sensitivity to model specification," Transportation Research Part B: Methodological, Elsevier, vol. 23(2), pages 151-158, April.
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