Bottleneck Congestion: Differentiating the Coarse Charge
AbstractThe traditional bottleneck model for road congestion promotes the implementation of a triangular, fully time varying, charge as the optimal solution for the road congestion externality. However, cognitive and technological barriers put a practical limit to the degree of differentiation real world mplementations can handle. The traditional approach to accommodate for this concern has been a step toll, with the single step coarse charge as its simplest case. In this paper we study how efficiency of the coarse charge can be improved by differentiating its level and timing across groups of travellers. We use the traditional bottleneck model to analyse how the coarse charge can be differentiated over two groups of travellers assuming inelastic peak-hour demand. The results of our analysis indicate that differentiating the coarse charge across two groups of travellers considerably improves its efficiency without increasing cognitive effort and decision making costs for the individual traveller. A numeric illustration reveals a welfare gain of 69% of the first best charge, up from 53% for the generic coarse charge. This increase is similar to what is obtained by moving from the coarse charge to a generic two step toll. Once different groups have been defined, one could in fact achieve the same gains by temporal separation of drivers, for example by use of licence plate numbers. The presented charging regime has a considerable degree of flexibility with respect to share of travellers to attribute to each scheme, which further adds to its merits in practical applicability.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 10-097/3.
Date of creation: 23 Sep 2010
Date of revision:
Contact details of provider:
Web page: http://www.tinbergen.nl
Traffic congestion; Road pricing; Bottleneck model; Step tolls;
Find related papers by JEL classification:
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
- D62 - Microeconomics - - Welfare Economics - - - Externalities
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Fosgerau, Mogens, 2011.
"How a fast lane may replace a congestion toll,"
42271, University Library of Munich, Germany.
- Fosgerau, Mogens, 2011. "How a fast lane may replace a congestion toll," Transportation Research Part B: Methodological, Elsevier, Elsevier, vol. 45(6), pages 845-851, July.
- Feng Xiao & Zhen Qian & H. Zhang, 2011. "The Morning Commute Problem with Coarse Toll and Nonidentical Commuters," Networks and Spatial Economics, Springer, Springer, vol. 11(2), pages 343-369, June.
- Mogens Fosgerau & André De Palma & Anders Karlstrom & Kenneth A. Small, 2012. "Trip timing and scheduling preferences," Working Papers, HAL hal-00742267, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antoine Maartens (+31 626 - 160 892)).
If references are entirely missing, you can add them using this form.