IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/20110059.html
   My bibliography  Save this paper

Congesting Pricing in a Road and Rail Network with Heterogeneous Values of Time and Schedule Delay

Author

Listed:
  • Vincent van den Berg

    (VU University Amsterdam)

  • Erik T. Verhoef

    (VU University Amsterdam)

Abstract

We analyse congestion pricing in a road and rail network with heterogeneous users. On the road there is bottleneck congestion. In the train there is crowding congestion. We separately analyse "proportional heterogeneity" that varies the values of time and schedule delay scalarly in fixed proportions and "ratio heterogeneity" that is in the ratio of value of time to value of schedule delay. We analyse first-best pricing and second-best pricing on only road or rail. More "ratio heterogeneity" lowers the relative efficiency of welfare maximisation by pricing only the road. This relative efficiency also decreases with proportional heterogeneity. Conversely, in previous research with two parallel roads, the relative efficiency of "single-link pricing" increased with proportional heterogeneity. This difference is caused by two road being perfect substitutes, while car and train are imperfect substitutes. The welfare gain of congestion pricing in the train is les s affected by heterogeneity. However, the relative efficiency of "profit maximisation on rail only" decreases with proportional and ratio heterogeneity. There are marked differences in the distributional effects on road and rail. On the road, pricing is generally more beneficial for the user the higher her value of time or schedule delay is. In the train, pricing has no distributional effects or is less beneficial the higher a user's value of time or schedule delay is.

Suggested Citation

  • Vincent van den Berg & Erik T. Verhoef, 2011. "Congesting Pricing in a Road and Rail Network with Heterogeneous Values of Time and Schedule Delay," Tinbergen Institute Discussion Papers 11-059/3, Tinbergen Institute, revised 24 May 2012.
    • Handle: RePEc:tin:wpaper:20110059
    as

    Download full text from publisher

    File URL: https://papers.tinbergen.nl/11059.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. van den Berg, Vincent & Verhoef, Erik T., 2011. "Congestion tolling in the bottleneck model with heterogeneous values of time," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 60-78, January.
    2. Braid, Ralph M., 1996. "Peak-Load Pricing of a Transportation Route with an Unpriced Substitute," Journal of Urban Economics, Elsevier, vol. 40(2), pages 179-197, September.
    3. Kraus, Marvin, 1991. "Discomfort externalities and marginal cost transit fares," Journal of Urban Economics, Elsevier, vol. 29(2), pages 249-259, March.
    4. Huang, Hai-Jun, 2000. "Fares and tolls in a competitive system with transit and highway: the case with two groups of commuters," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 36(4), pages 267-284, December.
    5. Small, Kenneth A. & Yan, Jia, 2001. "The Value of "Value Pricing" of Roads: Second-Best Pricing and Product Differentiation," Journal of Urban Economics, Elsevier, vol. 49(2), pages 310-336, March.
    6. Kraus, Marvin, 2003. "A new look at the two-mode problem," Journal of Urban Economics, Elsevier, vol. 54(3), pages 511-530, November.
    7. Small, Kenneth A., 2001. "The Value of Pricing," University of California Transportation Center, Working Papers qt0rm449sx, University of California Transportation Center.
    8. Robin Lindsey, 2004. "Existence, Uniqueness, and Trip Cost Function Properties of User Equilibrium in the Bottleneck Model with Multiple User Classes," Transportation Science, INFORMS, vol. 38(3), pages 293-314, August.
    9. van den Berg, Vincent & Verhoef, Erik T., 2011. "Winning or losing from dynamic bottleneck congestion pricing?: The distributional effects of road pricing with heterogeneity in values of time and schedule delay," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 983-992, August.
    10. Layard, Richard, 1977. "The Distributional Effects of Congestion Taxes," Economica, London School of Economics and Political Science, vol. 44(175), pages 297-304, August.
    11. Richard Arnott & An Yan, 2000. "The Two-Mode Problem: Second-Best Pricing and Capacity," Boston College Working Papers in Economics 474, Boston College Department of Economics.
    12. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-260, May.
    13. Wen-Xiang Wu & Hai-Jun Huang, 2014. "Equilibrium and Modal Split in a Competitive Highway/Transit System Under Different Road-use Pricing Strategies," Journal of Transport Economics and Policy, University of Bath, vol. 48(1), pages 153-169, January.
    14. Yang, Hai & Yan Kong, Hoi & Meng, Qiang, 2001. "Value-of-time distributions and competitive bus services," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 37(6), pages 411-424, December.
    15. Mark Wardman & Gerard Whelan, 2011. "Twenty Years of Rail Crowding Valuation Studies: Evidence and Lessons from British Experience," Transport Reviews, Taylor & Francis Journals, vol. 31(3), pages 379-398.
    16. Tabuchi Takatoshi, 1993. "Bottleneck Congestion and Modal Split," Journal of Urban Economics, Elsevier, vol. 34(3), pages 414-431, November.
    17. Li, Zheng & Hensher, David A., 2011. "Crowding and public transport: A review of willingness to pay evidence and its relevance in project appraisal," Transport Policy, Elsevier, vol. 18(6), pages 880-887, November.
    18. Erik T. Verhoef & Kenneth A. Small, 2004. "Product Differentiation on Roads," Journal of Transport Economics and Policy, University of Bath, vol. 38(1), pages 127-156, January.
    19. Kraus, Marvin & Yoshida, Yuichiro, 2002. "The Commuter's Time-of-Use Decision and Optimal Pricing and Service in Urban Mass Transit," Journal of Urban Economics, Elsevier, vol. 51(1), pages 170-195, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul Koster & Hans Koster, 2013. "Commuters' Preferences for Fast and Reliable Travel," Tinbergen Institute Discussion Papers 13-075/VIII, Tinbergen Institute, revised 30 Apr 2015.
    2. Yu, Xiaojuan & van den Berg, Vincent A.C. & Verhoef, Erik T., 2019. "Carpooling with heterogeneous users in the bottleneck model," Transportation Research Part B: Methodological, Elsevier, vol. 127(C), pages 178-200.
    3. Paul Koster & Hans Koster, 2013. "Analysing Heterogeneity in the Value of Travel Time and Reliability: A Semiparametric Estimation Approach," ERSA conference papers ersa13p1032, European Regional Science Association.
    4. Paul Koster & Erik T. Verhoef & Simon Shepherd & David Watling, 2014. "Probabilistic Choice and Congestion Pricing with Heterogeneous Travellers and Price-Sensitive Demand," Tinbergen Institute Discussion Papers 14-078/VIII, Tinbergen Institute, revised 13 Nov 2014.
    5. Guo, Ren-Yong & Szeto, W.Y., 2018. "Day-to-day modal choice with a Pareto improvement or zero-sum revenue scheme," Transportation Research Part B: Methodological, Elsevier, vol. 110(C), pages 1-25.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Zhi-Chun & Huang, Hai-Jun & Yang, Hai, 2020. "Fifty years of the bottleneck model: A bibliometric review and future research directions," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 311-342.
    2. Liu, Peng & Liu, Jielun & Ong, Ghim Ping & Tian, Qiong, 2020. "Flow pattern and optimal capacity in a bi-modal traffic corridor with heterogeneous users," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    3. Li, Zhi-Chun & Zhang, Liping, 2020. "The two-mode problem with bottleneck queuing and transit crowding: How should congestion be priced using tolls and fares?," Transportation Research Part B: Methodological, Elsevier, vol. 138(C), pages 46-76.
    4. van den Berg, Vincent & Verhoef, Erik T., 2011. "Winning or losing from dynamic bottleneck congestion pricing?," Journal of Public Economics, Elsevier, vol. 95(7), pages 983-992.
    5. Hörcher, Daniel & Tirachini, Alejandro, 2021. "A review of public transport economics," Economics of Transportation, Elsevier, vol. 25(C).
    6. Kraus, Marvin, 2012. "Road pricing with optimal mass transit," Journal of Urban Economics, Elsevier, vol. 72(2), pages 81-86.
    7. Wang, Wei (Walker) & Wang, David Z.W. & Zhang, Fangni & Sun, Huijun & Zhang, Wenyi & Wu, Jianjun, 2017. "Overcoming the Downs-Thomson Paradox by transit subsidy policies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 95(C), pages 126-147.
    8. Kenneth Small, 2015. "The Bottleneck Model: An Assessment and Interpretation," Working Papers 141506, University of California-Irvine, Department of Economics.
    9. Hideo Konishi, 2004. "Uniqueness of User Equilibrium in Transportation Networks with Heterogeneous Commuters," Transportation Science, INFORMS, vol. 38(3), pages 315-330, August.
    10. Guo, Ren-Yong & Szeto, W.Y. & Long, Jiancheng, 2020. "Trial-and-error operation schemes for bimodal transport systems," Transportation Research Part B: Methodological, Elsevier, vol. 131(C), pages 106-123.
    11. Yu, Xiaojuan & van den Berg, Vincent A.C. & Verhoef, Erik T., 2019. "Carpooling with heterogeneous users in the bottleneck model," Transportation Research Part B: Methodological, Elsevier, vol. 127(C), pages 178-200.
    12. Fu, Xinying & van den Berg, Vincent A.C. & Verhoef, Erik T., 2018. "Private road supply in networks with heterogeneous users," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 430-443.
    13. Tian, Li-Jun & Huang, Hai-Jun, 2015. "Modeling the modal split and trip scheduling with commuters’ uncertainty expectation," European Journal of Operational Research, Elsevier, vol. 244(3), pages 815-822.
    14. Ihab Kaddoura & Benjamin Kickhöfer & Andreas Neumann & Alejandro Tirachini, 2015. "Agent-based optimisation of public transport supply and pricing: impacts of activity scheduling decisions and simulation randomness," Transportation, Springer, vol. 42(6), pages 1039-1061, November.
    15. Small, Kenneth A., 2015. "The bottleneck model: An assessment and interpretation," Economics of Transportation, Elsevier, vol. 4(1), pages 110-117.
    16. Wu, Wen-Xiang & Huang, Hai-Jun, 2015. "An ordinary differential equation formulation of the bottleneck model with user heterogeneity," Transportation Research Part B: Methodological, Elsevier, vol. 81(P1), pages 34-58.
    17. van den Berg, Vincent & Verhoef, Erik T., 2011. "Congestion tolling in the bottleneck model with heterogeneous values of time," Transportation Research Part B: Methodological, Elsevier, vol. 45(1), pages 60-78, January.
    18. Tian, Qiong & Liu, Peng & Ong, Ghim Ping & Huang, Hai-Jun, 2021. "Morning commuting pattern and crowding pricing in a many-to-one public transit system with heterogeneous users," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    19. Tian, Li-Jun & Yang, Hai & Huang, Hai-Jun, 2013. "Tradable credit schemes for managing bottleneck congestion and modal split with heterogeneous users," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 54(C), pages 1-13.
    20. Kraus, Marvin, 2003. "A new look at the two-mode problem," Journal of Urban Economics, Elsevier, vol. 54(3), pages 511-530, November.

    More about this item

    Keywords

    Congestion Pricing; Car Travel; Train Travel; Heterogeneity in Value of Time; Heterogeneity in Value of Schedule Delay; Substitute Modes;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tin:wpaper:20110059. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tinbergen Office +31 (0)10-4088900 (email available below). General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.