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The Demand Curve Under Road Pricing and the Problem of Political Feasibility

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  • Lave, Charles

Abstract

Road pricing is widely advocated as a solution to congestion problems. The underlying theory is well developed, and we even have the technology to implement it without toll booths. Only political barriers remain. Decision makers are reluctant to retrofit tolls on existing highways because they do not know what circumstances might make such an action acceptable to the public. This paper develops a graphical model that displays the interaction between road capacity, user demand, travel speed and toll charges. The model is then used to analyze the sources of public resistance to road pricing. Might the potential response to road pricing be predicted using data from the new toll roads now being built around the United States? Our model shows it cannot. Political success depends on the demand characteristics at the right-hand side of the demand curve, while toll road data only trace out the left-hand side of the curve. Our model also shows situations where the new toll roads are likely to generate public anger. The Appendix discusses an experimental design that uses unobtrusive measures to assess the effect of a transportation project.

Suggested Citation

  • Lave, Charles, 1994. "The Demand Curve Under Road Pricing and the Problem of Political Feasibility," University of California Transportation Center, Working Papers qt5165m7jr, University of California Transportation Center.
    • Handle: RePEc:cdl:uctcwp:qt5165m7jr
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    Cited by:

    1. Marcycruz de Leon & Thomas M Fullerton Jr & Brian W Kelly, 2009. "Tolls, Exchange Rates, And Borderplex International Bridge Traffic," Articles, International Journal of Transport Economics, vol. 36(2).
    2. Vanoutrive, Thomas & Zijlstra, Toon, 2018. "Who has the right to travel during peak hours? On congestion pricing and ‘desirable’ travellers," Transport Policy, Elsevier, vol. 63(C), pages 98-107.
    3. Verhoef, Erik, 1995. "The demand curve under road pricing and the problem of political feasibility: A comment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 29(6), pages 459-465, November.
    4. R H M Emmerink & P Nijkamp & P Rietveld, 1995. "Is Congestion Pricing a First-Best Strategy in Transport Policy? A Critical Review of Arguments," Environment and Planning B, , vol. 22(5), pages 581-602, October.
    5. Johnston, Robert A. & Lund, Jay R. & Craig, Paul P., 1995. "Capacity-Allocation Methods for Reducing Urban Traffic Congestion," University of California Transportation Center, Working Papers qt9237z4p6, University of California Transportation Center.
    6. Verhoef, Erik T., 1999. "Time, speeds, flows and densities in static models of road traffic congestion and congestion pricing," Regional Science and Urban Economics, Elsevier, vol. 29(3), pages 341-369, May.
    7. Glazer, Amihai & Niskanen, Esko, 2000. "Which consumers benefit from congestion tolls?," University of California Transportation Center, Working Papers qt33d88115, University of California Transportation Center.
    8. Michael J. Clay * & Patricia L. Mokhtarian, 2004. "Personal travel management: the adoption and consideration of travel-related strategies," Transportation Planning and Technology, Taylor & Francis Journals, vol. 27(3), pages 181-209, June.
    9. Claude Abraham & Alain Bonnafous & Daniel Chabanol & Marc Chabert & Yves Crozet & Christiane Dalmais, 2000. "Péage et financement d'infrastructures en milieu urbain - Lyon, les leçons d'un périphérique. Actes du colloque, 5-6 décembre 2000, Lyon (France)," Post-Print halshs-00200161, HAL.
    10. Hall, Jonathan D., 2018. "Pareto improvements from Lexus Lanes: The effects of pricing a portion of the lanes on congested highways," Journal of Public Economics, Elsevier, vol. 158(C), pages 113-125.
    11. De Borger, Bruno, 2001. "Discrete choice models and optimal two-part tariffs in the presence of externalities: optimal taxation of cars," Regional Science and Urban Economics, Elsevier, vol. 31(4), pages 471-504, July.
    12. Yves Crozet & Grégoire Marlot, 2001. "Urban toll and sustainable city: Pricing forms and various kinds of economic rationale [Péage urbain et ville " soutenable " : figures de la tarification et avatars de la raison économiqu," Post-Print halshs-01356830, HAL.
    13. Galit Cohen-Blankshtain & Hillel Bar-Gera & Yoram Shiftan, 2023. "Congestion pricing and positive incentives: conceptual analysis and empirical findings from Israel," Transportation, Springer, vol. 50(2), pages 607-633, April.
    14. Dominique Bouf & Pierre-Yves Péguy & Stéphanie Souche & Jean-Louis Routhier & Nicolas Ovtracht, 2006. "Les transports en Chine en 2050 : rapport final," Post-Print halshs-00107061, HAL.
    15. E Verhoef & P Nijkamp & P Rietveld, 1996. "Regulatory Parking Policies at the Firm Level," Environment and Planning C, , vol. 14(3), pages 385-406, September.

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