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Alleviating Traffic Congestion: Alternatives to Road Pricing

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  • Richard Arnott

    ()
    (Boston College)

Abstract

Economists' favorite remedy for traffic congestion is road pricing. Not only is road pricing based on sound economic principles, but also given current technology it could be implemented at reasonable cost and in a flexible and sophisticated manner. But there are serious obstacles to the widespread adoption of road pricing. There are problems of phase-in: the fixed costs of introducing any system of road pricing, as well as the problems of coordinating road pricing across jurisdictions, including standardization and the treatment of out-of-towners. Political acceptability is an even more serious obstacle. How can congestion pricing be 'sold' to economically unsophisticated voters who are justifiably suspicious of any new government taxes and charges? This paper will not argue against road pricing, though it will point out some of the difficulties associated with the policy that economists have tended to ignore or to gloss over. Rather, it will examine some of the alternatives to road pricing. More specifically, it will focus on two related questions, one positive, one normative, on the assumption that congestion pricing is not introduced, at least on city streets. The positive question: What are the likely effects of policies other than road pricing on alleviating road congestion? The normative question: What mix of policies (road pricing excluded) would be most effective in alleviating traffic congestion? Throughout the focus will be on urban traffic congestion. Alternatives to road pricing can be grouped into five categories: 1. Expansion and upgrading of existing road capacity; 2. Expansion and upgrading of mass transit; 3. Regulation; 4. Information; 5. Non-road transport pricing. While the emphasis of the paper will be on qualitative analysis, there will be some attempts at quantification via back-of-the-envelope calculations.

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Bibliographic Info

Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 282..

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Length: 44 pages
Date of creation: Sep 1994
Date of revision:
Handle: RePEc:boc:bocoec:282

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Keywords: traffic congestion; road pricing;

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References

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  1. Gillen, David W., 1977. "Estimation and specification of the effects of parking costs on urban transport mode choice," Journal of Urban Economics, Elsevier, vol. 4(2), pages 186-199, April.
  2. Newbery, David M, 1988. "Road Damage Externalities and Road User Charges," Econometrica, Econometric Society, vol. 56(2), pages 295-316, March.
  3. Richard Arnott & James G. MacKinnon, 1976. "Market and Shadow Land Rents with Congestion," Working Papers 250, Queen's University, Department of Economics.
  4. Small, Kenneth A. & Gomez-Ibanez, Jose A., 1999. "Urban transportation," Handbook of Regional and Urban Economics, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 46, pages 1937-1999 Elsevier.
  5. Richard Arnott & Andre de Palma & Robin Lindsey, 1985. "Economics of a Bottleneck," Working Papers 636, Queen's University, Department of Economics.
  6. Gronau Reuben, 1994. "Optimal Road Capacity with a Suboptimal Congestion Toll," Journal of Urban Economics, Elsevier, vol. 36(1), pages 1-7, July.
  7. Henderson, J. Vernon, 1981. "The economics of staggered work hours," Journal of Urban Economics, Elsevier, vol. 9(3), pages 349-364, May.
  8. Richard Arnott, 1989. "Does Providing Information to Drivers Reduce Traffic Congestion?," Discussion Papers 864, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  9. Kraus, Marvin, 1989. "The welfare gains from pricing road congestion using automatic vehicle identification and on-vehicle meters," Journal of Urban Economics, Elsevier, vol. 25(3), pages 261-281, May.
  10. Sullivan, Arthur M., 1983. "Second-best policies for congestion externalities," Journal of Urban Economics, Elsevier, vol. 14(1), pages 105-123, July.
  11. Boyer, Marcel & Dionne, Georges, 1987. "The economics of road safety," Transportation Research Part B: Methodological, Elsevier, vol. 21(5), pages 413-431, October.
  12. Segal, David & Steinmeier, Thomas L., 1980. "The incidence of congestion and congestion tolls," Journal of Urban Economics, Elsevier, vol. 7(1), pages 42-62, January.
  13. William Vickrey, 1971. "Responsive Pricing of Public Utility Services," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 337-346, Spring.
  14. Frankena, Mark W., 1987. "Capital-biased subsidies, bureaucratic monitoring, and bus scrapping," Journal of Urban Economics, Elsevier, vol. 21(2), pages 180-193, March.
  15. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May.
  16. Mohring, Herbert, 1970. "The Peak Load Problem with Increasing Returns and Pricing Constraints," American Economic Review, American Economic Association, vol. 60(4), pages 693-705, September.
  17. Wilson, John D., 1983. "Optimal road capacity in the presence of unpriced congestion," Journal of Urban Economics, Elsevier, vol. 13(3), pages 337-357, May.
  18. Mohring, Herbert, 1972. "Optimization and Scale Economies in Urban Bus Transportation," American Economic Review, American Economic Association, vol. 62(4), pages 591-604, September.
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Cited by:
  1. Richard Arnott, 2001. "The Economic Theory of Urban Traffic Congestion: A Microscopic Research Agenda," Boston College Working Papers in Economics 502, Boston College Department of Economics.

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