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Which Consumers Benefit from Congestion Tolls?

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Author Info

  • Amihai Glazer
  • Esko Niskanen

Abstract

A large literature demonstrates that congestion tolls can increase aggregate welfare. Nevertheless, congestion tolls are rarely observed. And though road tolls are imposed to raise revenue (as on bridges, tunnels, and some highways), almost always the tolls are imposed on the faster of several alternative modes. Thus highways designed for fast travel may be tolled, but local roads on the same route are not tolled. Governments often charge fees at airports (the fast mode) but not tolls on a road connecting the same cities. The paper explicitly considers reassignment, extending ear-lier studies by considering two congestible modes. This introduces novel considerations: a toll on a slow mode, rather than inducing some people to stop travelling, may instead cause some to shift to the other mode; and a toll on the fast mode may cause users to switch to the slow mode, in-ducing some former users of the slow mode to travel less. These effects can cause a toll on the fast mode to be more politically attractive than a toll on the slow mode.

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Bibliographic Info

Paper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 216.

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Date of creation: 17 Mar 2000
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Handle: RePEc:fer:dpaper:216

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Keywords: Congestion tolls; route choice; consumer welfare;

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References

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  1. Glazer, Amihai, 1981. "Congestion Tolls and Consumer Welfare," Public Finance = Finances publiques, , vol. 36(1), pages 77-83.
  2. 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.
  3. Layard, Richard, 1977. "The Distributional Effects of Congestion Taxes," Economica, London School of Economics and Political Science, vol. 44(175), pages 297-304, August.
  4. Niskanen, Esko, 1987. "Congestion tolls and consumer welfare," Transportation Research Part B: Methodological, Elsevier, vol. 21(2), pages 171-174, April.
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Citations

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Cited by:
  1. Börjesson, Maria & Kristoffersson, Ida, 2012. "Estimating welfare effects of congestion charges in real world settings," Working papers in Transport Economics 2012:13, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
  2. Daniel Albalate & Germa Bel, 2008. "Shaping urban traffic patterns through congestion charging: What factors drive success or failure?," IREA Working Papers 200801, University of Barcelona, Research Institute of Applied Economics, revised Jan 2008.
  3. Holgun-Veras, Jos & Cetin, Mecit, 2009. "Optimal tolls for multi-class traffic: Analytical formulations and policy implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(4), pages 445-467, May.
  4. Eliasson, Jonas & Mattsson, Lars-Göran, 2006. "Equity effects of congestion pricing: Quantitative methodology and a case study for Stockholm," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(7), pages 602-620, August.
  5. Jonas Westin, 2011. "Labor Market Effects of Road Pricing in a Population with Continuously Distributed Value of Time," ERSA conference papers ersa10p1458, European Regional Science Association.
  6. Armelius, Hanna & Hultkrantz, Lars, 2006. "The politico-economic link between public transport and road pricing: An ex-ante study of the Stockholm road-pricing trial," Transport Policy, Elsevier, vol. 13(2), pages 162-172, March.
  7. Leonid Engelson & Ida Kristoffersson & Mohammad Saifuzzaman & André De Palma & Kiarash Motamedi, 2013. "Comparison of two dynamic transportation models: The case of Stockholm congestion charging," Working Papers hal-00779285, HAL.
  8. Wang, Judith Y.T. & Lindsey, Robin & Yang, Hai, 2011. "Nonlinear pricing on private roads with congestion and toll collection costs," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 9-40, January.
  9. Lisa Schweitzer & Brian Taylor, 2008. "Just pricing: the distributional effects of congestion pricing and sales taxes," Transportation, Springer, vol. 35(6), pages 797-812, November.
  10. Kutzbach, Mark J., 2009. "Motorization in developing countries: Causes, consequences, and effectiveness of policy options," Journal of Urban Economics, Elsevier, vol. 65(2), pages 154-166, March.
  11. Hultkrantz, Lars & Nilsson, Jan-Eric & Arvidsson, Sara, 2012. "Voluntary internalization of speeding externalities with vehicle insurance," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 926-937.
  12. Timilsina, Govinda R. & Dulal, Hari B., 2008. "Fiscal policy instruments for reducing congestion and atmospheric emissions in the transport sector : a review," Policy Research Working Paper Series 4652, The World Bank.

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