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Speed Choice, Car Following Theory and Congestion Tolling


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  • Jan Rouwendal

    (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam)


This paper provides a link between car following theory and the economic theoryof road congestion by means of a theory of speed choice. According to this theory speedchoice is based on a trade-off between the benefits (shorter travel time) and cost (higheraccident risk) of driving faster. Accident risk is related to the distance to the ‘leader’and by elaborating this relationship a number of car-following models can be derived fromthis theory of speed choice. Wit homogeneous traffic, steady state analysis leads to amodel that generalizes the conventional Pigou-Knight analysis: it has an endogenous speedchoice curve and requires the incorporation of accident risk in the value of travel time. Afurther generalization of this model to steady states with heterogeneous traffic ispossible and leads to the conclusion that first best tolls will in general requiredifferentiation over groups of drivers. Finally a general bottleneck model is discussedthat contains Vickrey’s (1969) and Verhoef’s (2002) versions as special cases. This results in aclarification of Verhoef’s finding that implementation of the optimal Vickrey toll canresult in a deterioration of welfare.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 02-102/3.

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Date of creation: 14 Oct 2002
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Handle: RePEc:dgr:uvatin:20020102

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Keywords: Car following; congestion tolling; traffic speed; traffic heterogeneity.;

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  1. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1990. "Economics of a bottleneck," Journal of Urban Economics, Elsevier, vol. 27(1), pages 111-130, January.
  2. Richard Arnott & Marvin Kraus, 1997. "When are Anonymous Congestion Charges Consistent with Marginal Cost Pricing?," Boston College Working Papers in Economics 354., Boston College Department of Economics.
  3. Verhoef, Erik T., 2001. "An Integrated Dynamic Model of Road Traffic Congestion Based on Simple Car-Following Theory: Exploring Hypercongestion," Journal of Urban Economics, Elsevier, vol. 49(3), pages 505-542, May.
  4. Newell, G. F., 2002. "A simplified car-following theory: a lower order model," Transportation Research Part B: Methodological, Elsevier, vol. 36(3), pages 195-205, March.
  5. Erik T. Verhoef, 1998. "An Integrated Dynamic Model of Road Traffic Congestion based on Simple Car-Following Theory," Tinbergen Institute Discussion Papers 98-030/3, Tinbergen Institute.
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