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Bottleneck congestion pricing and modal split: Redistribution of toll revenue

  • Mirabel, François
  • Reymond, Mathias

The paper examines the question of the redistribution of toll revenue as seen in a bottleneck congestion model. Our objective is to analyse the impact of this redistribution on total cost and on modal split between railroad and road. Following Tabuchi's two-mode model (Tabuchi, T., 1993. Bottleneck congestion and modal split. Journal of Urban Economics 34, 414-431.), we integrate a redistribution of toll revenue towards public transport into our study. In this context, we investigate two kinds of road toll regimes: a fine toll and a uniform toll. We will consider two types of railroad fare: when it is set equal to the marginal cost and when it is set equal to average cost. These models allow us to show that toll policy to be more efficient as long as toll revenue is directed towards public transport when the railroad fare is equal to average cost.

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Article provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.

Volume (Year): 45 (2011)
Issue (Month): 1 (January)
Pages: 18-30

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Handle: RePEc:eee:transa:v:45:y:2011:i:1:p:18-30
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  1. 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 161-79, March.
  2. Richard Arnott & Andre de Palma & Robin Lindsey, 1985. "Economics of a Bottleneck," Working Papers 636, Queen's University, Department of Economics.
  3. Yukihiro Kidokoro, 2005. "London-type congestion tax with revenue-recycling," Economics Bulletin, AccessEcon, vol. 18(1), pages 1-6.
  4. King, David & Manville, Michael & Shoup, Donald, 2007. "The political calculus of congestion pricing," University of California Transportation Center, Working Papers qt9js9z8gz, University of California Transportation Center.
  5. Mathias Reymond, 2004. "Les politiques d'accompagnement du péage urbain : étude sur l'acceptabilité en Suisse," Revue d'économie régionale et urbaine, Armand Colin, vol. 0(4), pages 609-630.
  6. Small, Kenneth A., 1992. "Using the Revenues from Congestion Pricing," University of California Transportation Center, Working Papers qt32p9m3mm, University of California Transportation Center.
  7. Ian W. H. Parry & Kenneth A. Small, 2009. "Should Urban Transit Subsidies Be Reduced?," American Economic Review, American Economic Association, vol. 99(3), pages 700-724, June.
  8. Kottenhoff, Karl & Brundell Freij, Karin, 2009. "The role of public transport for feasibility and acceptability of congestion charging - The case of Stockholm," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(3), pages 297-305, March.
  9. Parry, Ian W.H. & Bento, Antonio Miguel R., 1999. "Revenue recycling and the welfare effects of road pricing," Policy Research Working Paper Series 2253, The World Bank.
  10. repec:ebl:ecbull:v:18:y:2005:i:1:p:1-6 is not listed on IDEAS
  11. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May.
  12. Schade, J. & Baum, M., 2007. "Reactance or acceptance? Reactions towards the introduction of road pricing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(1), pages 41-48, January.
  13. Hau, Timothy D., 1992. "Economic fundamentals of road pricing : a diagrammatic analysis," Policy Research Working Paper Series 1070, The World Bank.
  14. King, David & Manville, Michael & Shoup, Donald, 2007. "The political calculus of congestion pricing," Transport Policy, Elsevier, vol. 14(2), pages 111-123, March.
  15. Danielis, Romeo & Marcucci, Edoardo, 2002. "Bottleneck road congestion pricing with a competing railroad service," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 38(5), pages 379-388, September.
  16. 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.
  17. Tabuchi Takatoshi, 1993. "Bottleneck Congestion and Modal Split," Journal of Urban Economics, Elsevier, vol. 34(3), pages 414-431, November.
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