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Congestion pricing, transit subsidies and dedicated bus lanes: Efficient and practical solutions to congestion

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Author Info

  • Basso, Leonardo J.
  • Guevara, Cristián Angelo
  • Gschwender, Antonio
  • Fuster, Marcelo

Abstract

We analyze urban congestion management policies through numerical analysis of a simple model that: allows users to choose between car, bus or an outside option (biking); consider congestion interactions between cars and buses; and allow for optimization of frequency, vehicle size, spacing between stops and percentage of capacity to be dedicated to bus lanes. We compare resulting service levels, social welfare and consumer surplus for a number of different policies and find that: (i) dedicated bus lanes is a better stand-alone policy than transit subsidization or congestion pricing. The latter is marginally better than subsidization but has a negative impact in consumer surplus. (ii) Efficient transit subsidies are quite large since in many cases first-best transit price is negative; establishing dedicated bus lanes or implementing congestion pricing render subsidies unnecessary for high demand levels. (iii) Both subsidization and dedicated bus lanes would count with public support while congestion pricing would probably encounter opposition. (iv) Transit subsidies and/or congestion pricing do not induce large changes on optimal bus size, frequency, circulation speeds and spacing between stops in mixed-traffic conditions: dedicated bus lanes do. (v) In all cases analyzed, revenues from congestion pricing are enough to cover transit subsidies; the optimal percentage of capacity that should be devoted for bus traffic is around one third.

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Bibliographic Info

Article provided by Elsevier in its journal Transport Policy.

Volume (Year): 18 (2011)
Issue (Month): 5 (September)
Pages: 676-684

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Handle: RePEc:eee:trapol:v:18:y:2011:i:5:p:676-684

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Related research

Keywords: Congestion pricing Subsidies Public transportation Bus lanes;

References

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  1. Sergio Jara-Díaz & Antonio Gschwender, 2003. "Towards a general microeconomic model for the operation of public transport," Transport Reviews, Taylor & Francis Journals, vol. 23(4), pages 453-469, December.
  2. Theodore Tsekeris & Stefan Voß, 2009. "Design and evaluation of road pricing: state-of-the-art and methodological advances," Netnomics, Springer, vol. 10(1), pages 5-52, April.
  3. Leonardo J. Basso & Anming Zhang, 2008. "Sequential peak-load pricing: the case of airports and airlines," Canadian Journal of Economics, Canadian Economics Association, vol. 41(3), pages 1087-1119, August.
  4. Parry, Ian W.H. & Small, Kenneth, 2007. "Should Urban Transit Subsidies Be Reduced?," Discussion Papers dp-07-38, Resources For the Future.
  5. Prud'homme, Rémy & Bocarejo, Juan Pablo, 2005. "The London congestion charge: a tentative economic appraisal," Transport Policy, Elsevier, vol. 12(3), pages 279-287, May.
  6. Nie, Yu (Marco) & Liu, Yang, 2010. "Existence of self-financing and Pareto-improving congestion pricing: Impact of value of time distribution," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(1), pages 39-51, January.
  7. Proost, Stef & Dender, Kurt Van, 2008. "Optimal urban transport pricing in the presence of congestion, economies of density and costly public funds," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(9), pages 1220-1230, November.
  8. Mohring, Herbert, 1972. "Optimization and Scale Economies in Urban Bus Transportation," American Economic Review, American Economic Association, vol. 62(4), pages 591-604, September.
  9. Huang, Hai-Jun, 2000. "Fares and tolls in a competitive system with transit and highway: the case with two groups of commuters," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 36(4), pages 267-284, December.
  10. Chen, Xumei & Yu, Lei & Zhang, Yushi & Guo, Jifu, 2009. "Analyzing urban bus service reliability at the stop, route, and network levels," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(8), pages 722-734, October.
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Citations

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Cited by:
  1. Basso, Leonardo J. & Jara-Díaz, Sergio R., 2012. "Integrating congestion pricing, transit subsidies and mode choice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 890-900.
  2. Tscharaktschiew, Stefan & Hirte, Georg, 2012. "Should subsidies to urban passenger transport be increased? A spatial CGE analysis for a German metropolitan area," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(2), pages 285-309.
  3. Tirachini, Alejandro & Hensher, David A. & Rose, John M., 2014. "Multimodal pricing and optimal design of urban public transport: The interplay between traffic congestion and bus crowding," Transportation Research Part B: Methodological, Elsevier, vol. 61(C), pages 33-54.
  4. Tirachini, Alejandro, 2014. "The economics and engineering of bus stops: Spacing, design and congestion," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 37-57.

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