Marginal Social Cost Pricing on a Transportation Network: Comparison of Second-Best Policies
AbstractIn this paper we evaluate and compare long-run economic effects of six road-pricing schemes aimed at internalizing social costs of transportation. In order to conduct this analysis, we employ a spatially disaggregated general equilibrium model of a regional economy that incorporates decisions of residents, firms, and developers, integrated with a spatially-disaggregated strategic transportation planning model that features mode, time period, and route choice. The model is calibrated to the greater Washington, DC metropolitan area. We compare two social cost functions - one restricted to congestion alone and another that accounts for other external effects of transportation. We find that when the ultimate policy goal is a reduction in the complete set of motor vehicle externalities, cordon-like policies and variable-toll policies lose some attractiveness compared to policies based primarily on mileage. We also find that full social cost pricing requires very high toll levels and therefore is bound to be controversial.
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 Resources For the Future in its series Discussion Papers with number dp-07-52.
Date of creation: 09 Jan 2008
Date of revision:
traffic congestion; social cost pricing; land use; welfare analysis; road pricing; general equilibrium; simulation; Washington DC;
Find related papers by JEL classification:
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Transportation: Demand, Supply, and Congestion
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government Pricing and Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-15 (All new papers)
- NEP-CMP-2008-03-15 (Computational Economics)
- NEP-GEO-2008-03-15 (Economic Geography)
- NEP-URE-2008-03-15 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ian W. H. Parry & Margaret Walls & Winston Harrington, 2007.
"Automobile Externalities and Policies,"
Journal of Economic Literature,
American Economic Association, vol. 45(2), pages 373-399, June.
- Anas, Alex & Rhee, Hyok-Joo, 2006.
"Curbing excess sprawl with congestion tolls and urban boundaries,"
Regional Science and Urban Economics,
Elsevier, vol. 36(4), pages 510-541, July.
- Alex Anas & Hyok-Joo Rhee, 2004. "Curbing Excess Sprawl with Congestion Tolls and Urban Boundaries," Urban/Regional 0408004, EconWPA.
- 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.
- Safirova, Elena & Gillingham, Kenneth, 2003.
"Measuring Marginal Congestion Costs of Urban Transportation: Do Networks Matter?,"
dp-03-56, Resources For the Future.
- Safirova, Elena & Gillingham, Kenneth & Houde, Sébastien, 2007. "Measuring marginal congestion costs of urban transportation: Do networks matter?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(8), pages 734-749, October.
- Parry, Ian & Small, Kenneth, 2002.
"Does Britain or the United States Have the Right Gasoline Tax?,"
dp-02-12-, Resources For the Future.
- Ian W. H. Parry & Kenneth A. Small, 2005. "Does Britain or the United States Have the Right Gasoline Tax?," American Economic Review, American Economic Association, vol. 95(4), pages 1276-1289, September.
- Proost, Stef & Van Dender, Kurt, 2004.
"7. Marginal Social Cost Pricing For All Transport Modes And The Effects Of Modal Budget Constraints,"
Research in Transportation Economics,
Elsevier, vol. 9(1), pages 159-177, January.
- Proost, Stef & Van Dender, K, 2003. "Marginal social cost pricing for all transport modes and the effects of modal budget constraints," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/119365, Katholieke Universiteit Leuven.
- Stef Proost & Kurt Van Dender, 2003. "Marginal Social Cost Pricing for all Transport modes and the effects of modal budget constraints," Energy, Transport and Environment Working Papers Series ete0311, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
- Small, Kenneth A. & Kazimi, Camilla, 1995.
"On the Costs of Air Pollution from Motor Vehicles,"
University of California Transportation Center, Working Papers
qt0sx81025, University of California Transportation Center.
- Small, K.A. & Kazimi, C., 1994. "On the Costs of Air Pollution from Motor Vehicules," Papers 94-95-3, California Irvine - School of Social Sciences.
- Santos, G. & Rojey, L. & Newbery, D.M., 2000. "The Environmental Benefits from Road Pricing," Cambridge Working Papers in Economics 0020, Faculty of Economics, University of Cambridge.
- Murphy, James & Delucchi, Mark, 1998. "A Review of the Literature on the Social Cost of Motor Vehicle Use in the United States," Institute of Transportation Studies, Working Paper Series qt1tk1s936, Institute of Transportation Studies, UC Davis.
- Parry, Ian W.H. & Timilsina, Govinda R., 2010.
"How should passenger travel in Mexico City be priced?,"
Journal of Urban Economics,
Elsevier, vol. 68(2), pages 167-182, September.
- Parry, Ian W.H. & Timilsina, Govinda R., 2008. "How Should Passenger Travel in Mexico City Be Priced?," Discussion Papers dp-08-17, Resources For the Future.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster).
If references are entirely missing, you can add them using this form.