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Proper Pricing for Transport Infrastructure and the Case of Urban Road Congestion

Author

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  • Stephen Glaister

    (Department of Civil and Environmental Engineering, Skempton Building, Imperial College London, London, SW7 2AZ, UK,s.glaister@imperial.ac.uk)

  • Daniel J. Graham

    (Department of Civil and Environmental Engineering, Skempton Building, Imperial College London, London, SW7 2AZ, UK, d.j.graham@imperial.ac.uk)

Abstract

For transport systems the issues of pricing, service quality, funding and investment in urban areas are inextricably interdependent. The paper first argues that no policy can be set for any of these aspects of transport in isolation from any other. Transport planners and urban policy-makers can choose to tolerate congestion, or build new capacity or introduce road user charging. These issues are explored and analysed in the context of London-Europe's most obviously resurgent city and the one with the most recent experience of road pricing in the form of the Congestion Charge. However, despite the evidence that in the centre, where it applies, the Congestion Charge has had broadly the effects economic theory would predict, there is still a growing problem for the rest of London and the UK caused largely by the combined effects of rising real incomes and the improving fuel efficiency of cars which reduces the impact of fuel taxes. This suggests a growing pressure for a national system of road pricing. To date 'prices', in the form of fuel duty (over £0.50 out of each £0.80 for a litre of fuel) have been set on the basis of historical precedent or political expediency. The paper sets out a regionally based model to analyse the implications of setting alternative levels of congestion charging and environmental taxes covering the whole of England. This includes modelling the implications for other transport modes and the net changes accruing to drivers and the Exchequer. Having presented the implications of some alternative policies, the paper discusses a number of the issues of political economy that would have to be resolved. While there seems to be little alternative to user charging in some form sooner or later, the sooner it can be introduced the more good it can do. However, the difficulties are real, less tractable than some people appear to believe and they have to be identified and dealt with. Perhaps the most significant unresolved problem is not the technical feasibility of such a system of national road pricing, but finding an appropriate, accountable and acceptable method for overseeing and administering the funds such a system would generate.

Suggested Citation

  • Stephen Glaister & Daniel J. Graham, 2006. "Proper Pricing for Transport Infrastructure and the Case of Urban Road Congestion," Urban Studies, Urban Studies Journal Limited, vol. 43(8), pages 1395-1418, July.
    • Handle: RePEc:sae:urbstu:v:43:y:2006:i:8:p:1395-1418
    DOI: 10.1080/00420980600776475
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    References listed on IDEAS

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    1. Glaister, Stephen & Graham, Daniel J., 2005. "An evaluation of national road user charging in England," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(7-9), pages 632-650.
    2. Verhoef, Erik T., 2002. "Second-best congestion pricing in general static transportation networks with elastic demands," Regional Science and Urban Economics, Elsevier, vol. 32(3), pages 281-310, May.
    3. Erik T. Verhoef, 2000. "articles: The implementation of marginal external cost pricing in road transport Long run vs short run and first-best vs second-best," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(3), pages 307-332.
    4. Daniel J. Graham & Stephen Glaister, 2006. "Spatial Implications of Transport Pricing," Journal of Transport Economics and Policy, University of Bath, vol. 40(2), pages 173-201, May.
    5. Daniel J. Graham & Stephen Glaister, 2002. "The Demand for Automobile Fuel: A Survey of Elasticities," Journal of Transport Economics and Policy, University of Bath, vol. 36(1), pages 1-25, January.
    6. Verhoef, Erik T., 2002. "Second-best congestion pricing in general networks. Heuristic algorithms for finding second-best optimal toll levels and toll points," Transportation Research Part B: Methodological, Elsevier, vol. 36(8), pages 707-729, September.
    7. Erik T. Verhoef & Kenneth A. Small, 2004. "Product Differentiation on Roads," Journal of Transport Economics and Policy, University of Bath, vol. 38(1), pages 127-156, January.
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    Cited by:

    1. Catherine Althaus & Lindsay M. Tedds & Allen McAvoy, 2011. "The Feasibility of Implementing a Congestion Charge on the Halifax Peninsula: Filling the "Missing Link" of Implementation," Canadian Public Policy, University of Toronto Press, vol. 37(4), pages 541-561, December.
    2. Hamid Reza Eftekhari & Mehdi Ghatee, 2017. "The lower bound for dynamic parking prices to decrease congestion through CBD," Operational Research, Springer, vol. 17(3), pages 761-787, October.
    3. Moshe Givoni, 2012. "Re-assessing the Results of the London Congestion Charging Scheme," Urban Studies, Urban Studies Journal Limited, vol. 49(5), pages 1089-1105, April.
    4. 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.
    5. Dieplinger, Maria & Fürst, Elmar, 2014. "The acceptability of road pricing: Evidence from two studies in Vienna and four other European cities," Transport Policy, Elsevier, vol. 36(C), pages 10-18.
    6. King, David & Manville, Michael & Shoup, Donald, 2007. "The political calculus of congestion pricing," Transport Policy, Elsevier, vol. 14(2), pages 111-123, March.
    7. Paul C. Cheshire, 2006. "Resurgent Cities, Urban Myths and Policy Hubris: What We Need to Know," Urban Studies, Urban Studies Journal Limited, vol. 43(8), pages 1231-1246, July.

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