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Why States Toll: An Empirical Model of Finance Choice

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  • David Levinson

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    (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)

Abstract

This paper examines the question of why some states impose tolls while others rely more heavily on gas and other taxes. A model to predict the share of street and highway revenue from tolls is estimated as a function of the share of non-resident workers, the policies of neighboring states, historical factors, and population. The more non-resident workers, the greater the likelihood of tolling, after controlling for the miles of toll road planned or constructed before the 1956 Interstate Act. Similarly if a state exports a number of residents to work out-of-state and those neighboring states toll, it will be more likely to retaliate by imposing its own tolls than if those states don't. The policy implications for the future of congestion pricing are clear, if hard to implement. Decentralization of finance and control of the road network from the federal to the state, metropolitan and city and county levels of government will increase the incentives for the highway-managing jurisdiction to impose tolls. And tolls are a necessary prerequisite for an economically efficient strategy of congestion pricing.

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File URL: http://nexus.umn.edu/Papers/WhyStatesToll.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by University of Minnesota: Nexus Research Group in its series Working Papers with number 200102.

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Date of creation: 2001
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Publication status: Published in Journal of Transport Economics and Policy 35(2) 223-238 (May)
Handle: RePEc:nex:wpaper:whystatestoll

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Cited by:
  1. De Borger, Bruno & Proost, Stef, 2012. "Transport policy competition between governments: A selective survey of the literature," Economics of Transportation, Elsevier, vol. 1(1), pages 35-48.
  2. David Levinson & Andrew Odlyzko, 2007. "Too Expensive to Meter: The influence of transaction costs in transportation and communication," Working Papers, University of Minnesota: Nexus Research Group 200802, University of Minnesota: Nexus Research Group, revised Feb 2007.
  3. Ubbels, Barry & Verhoef, Erik T., 2008. "Governmental competition in road charging and capacity choice," Regional Science and Urban Economics, Elsevier, vol. 38(2), pages 174-190, March.
  4. DE BORGER, Bruno & PROOST, Stef & VAN DENDER, Kurt, 2004. "Congestion and tax competition in a parallel network," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2004018, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Vickerman, Roger, 2008. "Provision of public transport under conflicting regulatory regimes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(9), pages 1176-1182, November.
  6. Grahn-Voorneveld, Sofia, 2011. "Sharing profit in parallel and serial transport networks," Working papers in Transport Economics, CTS - Centre for Transport Studies Stockholm (KTH and VTI) 2011:7, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
  7. Westin , Jonas & Basck, Pierre & Franklin, Joel P. & Proost , Stef & Raux , Charles, 2012. "Achieving political acceptability for new transport infrastructure in congested urban regions," Working papers in Transport Economics, CTS - Centre for Transport Studies Stockholm (KTH and VTI) 2012:19, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
  8. De Borger Bruno & Dunkerley Fay & Proost Stef, 2006. "Strategic investment and pricing decisions in a congested transport corridor," Energy, Transport and Environment Working Papers Series, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment ete0602, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
  9. Bruno de Borger & Stef Proost, 2004. "Vertical and horizontal tax competition in the transport sector," Reflets et perspectives de la vie économique, De Boeck Université, De Boeck Université, vol. 0(4), pages 45-64.
  10. Bruno De Borger & Fay Dunkerley & Stef Proost, 2008. "Capacity cost structure, welfare and cost recovery: are transport infrastructures with high fixed costs a handicap?," Center for Economic Studies - Discussion papers, Katholieke Universiteit Leuven, Centrum voor Economische Studiën ces0803, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  11. Gühnemann, Astrid & Koh, Andrew & Shepherd, Simon & Lawler, Mary, 2011. "Implications of interdependencies between charging strategies of local authorities for the protection of sensitive areas in the Trans-Pennine Corridor," Utilities Policy, Elsevier, Elsevier, vol. 19(1), pages 42-52, January.
  12. Bruno De Borger & Wilfried Pauwels, 2010. "A Nash bargaining solution to models of tax and investment competition: tolls and investment in serial transport corridors," Working Papers 2010/1, Institut d'Economia de Barcelona (IEB).

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