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Traffic Congestion and Congestion Pricing

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Author Info

  • C. Robin Lindsey

    (University of Alberta)

  • Erik T. Verhoef

    ()
    (Vrije Universiteit Amsterdam)

Abstract

For several decades growth of traffic volumes has outstrippedinvestments inroad infrastructure. The result has been a relentless increase intrafficcongestion. This paper reviews the economic principles behindcongestionpricing in static and dynamic settings, which derive from thebenefits ofcharging travellers for the externalities they create. Specialattention ispaid to various complications that make simple textbook congestionpricingmodels of limited relevance, and dictate that congestion pricingschemes bestudied from the perspective of the theory of the second best. Thesecomplications include pricing in networks, heterogeneity of users,stochasticcongestion, interactions of the transport sector with the rest of theeconomy,and tolling on private roads. Also the implications of congestionpricing foroptimal road capacity are considered, and finally some explanationsfor thelongstanding social and political resistance to road pricing areoffered.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-101/3.

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Date of creation: 21 Nov 2000
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Handle: RePEc:dgr:uvatin:20000101

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Web page: http://www.tinbergen.nl

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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. Verhoef, Erik T. & Emmerink, Richard H. M. & Nijkamp, Peter & Rietveld, Piet, 1996. "Information provision, flat and fine congestion tolling and the efficiency of road usage," Regional Science and Urban Economics, Elsevier, vol. 26(5), pages 505-529, August.
  2. Small, Kenneth A., 2001. "Using the Revenues from Congestion Pricing," University of California Transportation Center, Working Papers qt7170x9b0, University of California Transportation Center.
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  4. Verhoef, Erik & Nijkamp, Peter & Rietveld, Piet, 1996. "Second-Best Congestion Pricing: The Case of an Untolled Alternative," Journal of Urban Economics, Elsevier, vol. 40(3), pages 279-302, November.
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  9. 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.
  10. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1992. "Route choice with heterogeneous drivers and group-specific congestion costs," Regional Science and Urban Economics, Elsevier, vol. 22(1), pages 71-102, March.
  11. Glazer, Amihai & Niskanen, Esko, 2001. "Parking fees and congestion," University of California Transportation Center, Working Papers qt9h51t02k, University of California Transportation Center.
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  13. Richard Arnott & An Yan, 2000. "The Two-Mode Problem: Second-Best Pricing and Capacity," Boston College Working Papers in Economics 474, Boston College Department of Economics.
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  15. 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.
  16. Small, Kenneth A. & Yan, Jia, 2001. "The Value of "Value Pricing" of Roads: Second-Best Pricing and Product Differentiation," Journal of Urban Economics, Elsevier, vol. 49(2), pages 310-336, March.
  17. Hai Yang, 1999. "Evaluating the benefits of a combined route guidance and road pricing system in a traffic network with recurrent congestion," Transportation, Springer, vol. 26(3), pages 299-322, August.
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Citations

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Cited by:
  1. C. Robin Lindsey & Erik T. Verhoef, 1999. "Congestion Modelling," Tinbergen Institute Discussion Papers 99-091/3, Tinbergen Institute.
  2. André de Palma & Robin Lindsey & Fang Wu, 2007. "Private operators and time-of-day tolling on a congested road network," THEMA Working Papers 2007-02, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  3. Levinson, David, 2005. "Micro-foundations of congestion and pricing: A game theory perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(7-9), pages 691-704.
  4. Pascal Courty & Mario Pagliero, 2008. "Does Responsive Pricing Smooth Demand Shocks?," Economics Working Papers ECO2008/01, European University Institute.
  5. Safirova, Elena A. & Houde, Sébastien & Coleman, Conrad T. & Harrington, Winston & Lipman, D. Abram, 2006. "Long-Term Consequences of Congestion Pricing: A Small Cordon in the Hand Is Worth Two in the Bush," Discussion Papers dp-06-42, Resources For the Future.
  6. Richard Arnott & Eren Inci, 2008. "The Stability Of Downtown Parking And Traffic Congestion," Working Papers 200813, University of California at Riverside, Department of Economics, revised Nov 2008.
  7. José Holguín-Veras & Qian Wang & Ning Xu & Kaan Ozbay, 2011. "The impacts of time of day pricing on car user behavior: findings from the Port Authority of New York and New Jersey’s initiative," Transportation, Springer, vol. 38(3), pages 427-443, May.
  8. Erik T. Verhoef & Jan Rouwendal, 2001. "A Structural Model of Traffic Congestion," Tinbergen Institute Discussion Papers 01-026/3, Tinbergen Institute, revised 17 Oct 2003.
  9. Ronnie Schöb, 2005. "Not optimal, but Effective: the Multi-Mode Ticket for Reducing Urban Traffic Congestion in Medium-Sized Towns," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 3(3), pages 28-33, November.
  10. McArthur, David Philip & Thorsen, Inge & Ubøe, Jan, 2009. "Congested Interregional Infrastructure, Road Pricing and Regional Labour Markets," Discussion Papers 2009/3, Department of Business and Management Science, Norwegian School of Economics.
  11. Steininger, Karl W. & Friedl, Birgit & Gebetsroither, Brigitte, 2007. "Sustainability impacts of car road pricing: A computable general equilibrium analysis for Austria," Ecological Economics, Elsevier, vol. 63(1), pages 59-69, June.
  12. José Holguín-Veras & Sergio Jara-Díaz, 2010. "Optimal Two-Part Pricing and Capacity Allocation with Multiple User Classes and Elastic Arrivals at Constrained Transportation Facilities," Networks and Spatial Economics, Springer, vol. 10(4), pages 427-454, December.
  13. André De Palma & Robin Lindsey, 2009. "Traffic Congestion Pricing Methods and Technologies," Working Papers hal-00414526, HAL.
  14. Yafeng Yin & Siriphong Lawphongpanich, 2009. "Alternative marginal-cost pricing for road networks," Netnomics, Springer, vol. 10(1), pages 77-83, April.
  15. Rouwendal, Jan & Verhoef, Erik T., 2004. "2. Second-Best Pricing For Imperfect Substitutes In Urban Networks," Research in Transportation Economics, Elsevier, vol. 9(1), pages 27-60, January.

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