IDEAS home Printed from https://ideas.repec.org/a/eee/pubeco/v95y2011i7p983-992.html
   My bibliography  Save this article

Winning or losing from dynamic bottleneck congestion pricing?

Author

Listed:
  • van den Berg, Vincent
  • Verhoef, Erik T.

Abstract

This paper analyses the efficiency and distributional impacts of congestion pricing in Vickrey's (1969) dynamic bottleneck model of congestion, allowing for continuous distributions of values of time and schedule delay. We find that congestion pricing can leave a majority of travellers better off even without returning the toll revenues to them. We also find that the consumer surplus losses or gains from tolling are not strictly monotonic in the value of time, because they also depend on the value of schedule delays. The greatest losses are not incurred by drivers with the lowest value of time, but by users with an intermediate value of schedule delays and the lowest value of time for that value of schedule delays. For second-best pricing with an untolled alternative, the pattern of distributional effects is quite similar to that for first-best pricing. In contrast with results from prior static models, users who are indifferent between the two alternative routes are not the ones who gain least from this type of second-best pricing. Our results suggest that, in assessing the distributional impacts of road congestion pricing, it is important to take into account both the distribution of the value of time and of the value of schedule delays, as well as the dynamics of departure time choice.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:pubeco:v:95:y:2011:i:7:p:983-992
    DOI: 10.1016/j.jpubeco.2010.12.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0047272710002057
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jpubeco.2010.12.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. AndrÊ de Palma & Robin Lindsey, 2000. "Private toll roads: Competition under various ownership regimes," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 34(1), pages 13-35.
    2. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1993. "A Structural Model of Peak-Period Congestion: A Traffic Bottleneck with Elastic Demand," American Economic Review, American Economic Association, vol. 83(1), pages 161-179, March.
    3. Small, Kenneth A., 2001. "The Value of Pricing," University of California Transportation Center, Working Papers qt0rm449sx, University of California Transportation Center.
    4. 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.
    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. Kenneth A. Small & Clifford Winston & Jia Yan, 2005. "Uncovering the Distribution of Motorists' Preferences for Travel Time and Reliability," Econometrica, Econometric Society, vol. 73(4), pages 1367-1382, July.
    7. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-260, May.
    8. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1990. "Economics of a bottleneck," Journal of Urban Economics, Elsevier, vol. 27(1), pages 111-130, January.
    9. 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.
    10. 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.
    11. West, Sarah E., 2004. "Distributional effects of alternative vehicle pollution control policies," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 735-757, March.
    12. Mayeres, Inge & Proost, Stef, 2001. "Marginal tax reform, externalities and income distribution," Journal of Public Economics, Elsevier, vol. 79(2), pages 343-363, February.
    13. repec:bla:econom:v:44:y:1977:i:175:p:297-304 is not listed on IDEAS
    14. Small, Kenneth A, 1982. "The Scheduling of Consumer Activities: Work Trips," American Economic Review, American Economic Association, vol. 72(3), pages 467-479, June.
    15. Parry, I. W. H., 2002. "Comparing the efficiency of alternative policies for reducing traffic congestion," Journal of Public Economics, Elsevier, vol. 85(3), pages 333-362, September.
    16. 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.
    Full references (including those not matched with items on IDEAS)

    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. Kenneth Small, 2015. "The Bottleneck Model: An Assessment and Interpretation," Working Papers 141506, University of California-Irvine, Department of Economics.
    2. Small, Kenneth A., 2015. "The bottleneck model: An assessment and interpretation," Economics of Transportation, Elsevier, vol. 4(1), pages 110-117.
    3. Georgina Santos & Erik Verhoef, 2011. "Road Congestion Pricing," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 23, Edward Elgar Publishing.
    4. de Palma, André & Kilani, Moez & Lindsey, Robin, 2005. "Congestion pricing on a road network: A study using the dynamic equilibrium simulator METROPOLIS," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(7-9), pages 588-611.
    5. 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.
    6. van den Berg, Vincent A.C., 2014. "Coarse tolling with heterogeneous preferences," Transportation Research Part B: Methodological, Elsevier, vol. 64(C), pages 1-23.
    7. 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.
    8. 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.
    9. Chen, Hongyu & Liu, Yang & Nie, Yu (Marco), 2015. "Solving the step-tolled bottleneck model with general user heterogeneity," Transportation Research Part B: Methodological, Elsevier, vol. 81(P1), pages 210-229.
    10. Ramadurai, Gitakrishnan & Ukkusuri, Satish V. & Zhao, Jinye & Pang, Jong-Shi, 2010. "Linear complementarity formulation for single bottleneck model with heterogeneous commuters," Transportation Research Part B: Methodological, Elsevier, vol. 44(2), pages 193-214, February.
    11. 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.
    12. Mogens Fosgerau & Kurt Van Dender, 2013. "Road pricing with complications," Transportation, Springer, vol. 40(3), pages 479-503, May.
    13. Lamotte, Raphaël & de Palma, André & Geroliminis, Nikolas, 2017. "On the use of reservation-based autonomous vehicles for demand management," Transportation Research Part B: Methodological, Elsevier, vol. 99(C), pages 205-227.
    14. 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.
    15. 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.
    16. 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.
    17. Qixiu Cheng & Zhiyuan Liu & Feifei Liu & Ruo Jia, 2017. "Urban dynamic congestion pricing: an overview and emerging research needs," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 21(0), pages 3-18, August.
    18. Kraus, Marvin, 2003. "A new look at the two-mode problem," Journal of Urban Economics, Elsevier, vol. 54(3), pages 511-530, November.
    19. Chen, Hongyu & Nie, Yu (Marco) & Yin, Yafeng, 2015. "Optimal multi-step toll design under general user heterogeneity," Transportation Research Part B: Methodological, Elsevier, vol. 81(P3), pages 775-793.
    20. Vincent A.C. van den Berg & Erik T. Verhoef, 2015. "Robot Cars and Dynamic Bottleneck Congestion: The Effects on Capacity, Value of Time and Preference Heterogeneity," Tinbergen Institute Discussion Papers 15-062/VIII, Tinbergen Institute, revised 11 Jul 2016.

    More about this item

    Keywords

    Traffic congestion; Road pricing; Heterogeneity; Distributional impacts; Bottleneck model;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • 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:eee:pubeco:v:95:y:2011:i:7:p:983-992. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505578 .

    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.