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Long-Term Consequences of Congestion Pricing: A Small Cordon in the Hand Is Worth Two in the Bush

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  • Safirova, Elena A.

    ()
    (Resources for the Future)

  • Houde, Sébastien

    ()
    (Resources for the Future)

  • Coleman, Conrad T.

    ()
    (Resources for the Future)

  • Harrington, Winston

    ()
    (Resources for the Future)

  • Lipman, D. Abram

Abstract

We evaluate and compare the long-term economic effects of three cordon-based road pricing schemes applied to the Washington, DC, metropolitan area. To conduct this analysis, we employ a spatially disaggregated general equilibrium model of a regional economy that incorporates the decisions of residents, firms, and developers, integrated with a spatially disaggregated strategic transportation planning model that features mode, time period, and route choice. We find that all cordon pricing schemes increase welfare of the residents, as well as lead to GDP growth. At the optimum, the larger cordon and a double cordon lead to higher benefits than the small cordon encompassing downtown core. Nevertheless, the small cordon seems to be a safer bet because when the toll charge is set suboptimally, the net benefits from the small cordon compared to the optimum change negligibly, while the net benefits from the larger cordon decline sharply as the charge deviates from the optimal level.

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Bibliographic Info

Paper provided by Resources For the Future in its series Discussion Papers with number dp-06-42.

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Date of creation: 26 Oct 2006
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Handle: RePEc:rff:dpaper:dp-06-42

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Related research

Keywords: traffic congestion; cordon tolls; land use; welfare analysis; road pricing; general equilibrium; simulation; Washington DC;

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  1. C. Robin Lindsey & Erik T. Verhoef, 2000. "Traffic Congestion and Congestion Pricing," Tinbergen Institute Discussion Papers 00-101/3, Tinbergen Institute.
  2. Mun, Se-il & Konishi, Ko-ji & Yoshikawa, Kazuhiro, 2003. "Optimal cordon pricing," Journal of Urban Economics, Elsevier, vol. 54(1), pages 21-38, July.
  3. Georgina Santos, 2004. "Urban Congestion Charging: A Second-Best Alternative," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 38(3), pages 345-369, September.
  4. Safirova, Elena A. & Houde, Sébastien & Lipman, D. Abram & Harrington, Winston & Bagliano, Andrew D., 2006. "Congestion Pricing: Long-Term Economic and Land-Use Effects," Discussion Papers dp-06-37, Resources For the Future.
  5. Small, Kenneth A. & Gomez-Ilbanez, Jose A., 1998. "Road Pricing for Congestion Management: The Transition from Theory to Policy," University of California Transportation Center, Working Papers qt8kk909p1, University of California Transportation Center.
  6. Erik T. Verhoef, 2000. "Second-Best Congestion Pricing in General Networks - Algorithms for Finding Second-Best Optimal Toll Levels and Toll Points," Tinbergen Institute Discussion Papers 00-084/3, Tinbergen Institute.
  7. Anas, Alex & Xu, Rong, 1999. "Congestion, Land Use, and Job Dispersion: A General Equilibrium Model," Journal of Urban Economics, Elsevier, vol. 45(3), pages 451-473, May.
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