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A political economy model of road pricing

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  • De Borger, Bruno
  • Proost, Stef

Abstract

In this paper, we use a simple majority voting model to study the introduction of urban congestion tolls. The model allows for different types of uncertainty and considers different uses of the toll revenues. The following results are obtained. First, we show that individual uncertainty with respect to modal substitution costs may imply that a majority votes against road pricing ex ante, although a majority would have been in favor after its introduction ex post. Moreover, if a majority is against road pricing ex ante, there will also be no majority for organizing an experiment that would take away the individual uncertainty. Second, political uncertainty with respect to the use of the revenues corroborates the finding that ex ante more voters will be against the introduction of tolls. Third, both types of uncertainty suggest that fewer voters are against road pricing when toll revenues are used to subsidize public transport than when they are redistributed to all voters. Importantly, the results of this paper are consistent with a number of recent empirical observations on efforts to introduce road pricing, including the systematic rejection of road pricing in referenda, the more favorable attitudes towards road pricing after than before its introduction, and tying the toll revenues to support public transport.

Suggested Citation

  • De Borger, Bruno & Proost, Stef, 2012. "A political economy model of road pricing," Journal of Urban Economics, Elsevier, vol. 71(1), pages 79-92.
  • Handle: RePEc:eee:juecon:v:71:y:2012:i:1:p:79-92 DOI: 10.1016/j.jue.2011.08.002
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    Cited by:

    1. Kilani, Moez & Proost, Stef & van der Loo, Saskia, 2014. "Road pricing and public transport pricing reform in Paris: Complements or substitutes?," Economics of Transportation, Elsevier, pages 175-187.
    2. David Hensher & Corinne Mulley, 2014. "Complementing distance based charges with discounted registration fees in the reform of road user charges: the impact for motorists and government revenue," Transportation, Springer, vol. 41(4), pages 697-715, July.
    3. De Borger, Bruno & Proost, Stef, 2015. "The political economy of public transport pricing and supply decisions," Economics of Transportation, Elsevier, pages 95-109.
    4. Russo, Antonio, 2013. "Voting on road congestion policy," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 707-724.
    5. DE BORGER, Bruno & RUSSO, Antonio, 2015. "Lobbying and the political economy of pricing car access to downtown commercial districts," Working Papers 2015012, University of Antwerp, Faculty of Applied Economics.
    6. Bruno Borger & Stef Proost, 2016. "The political economy of pricing and capacity decisions for congestible local public goods in a federal state," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(5), pages 934-959, October.
    7. Giacomo A. M. Ponzetto & Edward L. Glaeser, 2017. "The political economy of transportation investment," Economics Working Papers 1556, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 2017.
    8. Bruno De Borger & Stef Proost, 2015. " Tax and regulatory policies for European Transport – getting there, but in the slow lane," Working Papers Department of Economics 497597, KU Leuven, Faculty of Economics and Business, Department of Economics.
    9. Jesper de Groote & Jos van Ommeren & Hans R.A. Koster, 2017. "The Impact of Parking Policy on House Prices," Tinbergen Institute Discussion Papers 17-037/VIII, Tinbergen Institute.
    10. Westin, Jonas & Franklin, Joel P. & Proost, Stef & Basck, Pierre & Raux, Charles, 2016. "Achieving political acceptability for new transport infrastructure in congested urban regions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 88(C), pages 286-303.
    11. De Borger, Bruno & Proost, Stef, 2016. "Can we leave road pricing to the regions? -The role of institutional constraints," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 208-222.
    12. repec:eee:juecon:v:99:y:2017:i:c:p:31-47 is not listed on IDEAS
    13. Fosgerau, Mogens & de Palma, André, 2013. "The dynamics of urban traffic congestion and the price of parking," Journal of Public Economics, Elsevier, vol. 105(C), pages 106-115.
    14. Dieplinger, Maria & Fürst, Elmar, 2014. "The acceptability of road pricing: Evidence from two studies in Vienna and four other European cities," Transport Policy, Elsevier, vol. 36(C), pages 10-18.
    15. Bruno De Borger & Jan Rouwendal, 2014. "Car User Taxes, Quality Characteristics, and Fuel Efficiency Household Behaviour and Market Adjustment," Journal of Transport Economics and Policy, University of Bath, vol. 48(3), pages 345-366, September.
    16. De Borger, Bruno & Proost, Stef, 2012. "Transport policy competition between governments: A selective survey of the literature," Economics of Transportation, Elsevier, pages 35-48.
    17. André De Palma & Stef Proost & Ravi Seshadri & Moshe Ben-Akiva, 2016. "Tolls Versus Mobility Permits: A Comparative Analysis," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01397582, HAL.
    18. Stef Proost & Jacques-Francois Thisse, 2017. "What Can Be Learned from Spatial Economics?," HSE Working papers WP BRP 167/EC/2017, National Research University Higher School of Economics.
    19. Börjesson, Maria & Hamilton, Carl J. & Näsman, Per & Papaix, Claire, 2015. "Factors driving public support for road congestion reduction policies: Congestion charging, free public transport and more roads in Stockholm, Helsinki and Lyon," Transportation Research Part A: Policy and Practice, Elsevier, vol. 78(C), pages 452-462.
    20. Fosgerau, Mogens & de Palma, André, 2013. "The dynamics of urban traffic congestion and the price of parking�," MPRA Paper 48433, University Library of Munich, Germany.
    21. Proost, Stef & Thisse, Jacques-François, 2015. "Skilled Cities, Regional Disparities, and Efficient Transport: The state of the art and a research agenda," CEPR Discussion Papers 10790, C.E.P.R. Discussion Papers.
    22. Grahn-Voorneveld , Sofia, 2014. "The inefficiency of marginal cost pricing on roads," Working papers in Transport Economics 2014:16, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    23. De Borger, Bruno & Russo, Antonio, 2017. "The political economy of pricing car access to downtown commercial districts," Transportation Research Part B: Methodological, Elsevier, vol. 98(C), pages 76-93.
    24. Hensher, David A. & Li, Zheng, 2013. "Referendum voting in road pricing reform: A review of the evidence," Transport Policy, Elsevier, vol. 25(C), pages 186-197.

    More about this item

    Keywords

    Policy reform; Road pricing; Majority voting;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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