Ring road investment, cordon tolling, and urban spatial structure

Ring roads, as candidate cordons, provide a convenient condition for implementing cordon tolling schemes. This paper presents a methodology for investigating the ring road investment and cordon tolling problems in a congested ring-radial city. A two-dimensional urban system equilibrium for a ring-radial city is first formulated, in which interrelated equilibria among stakeholders, including the authorities, property developers, households and commuters, are explicitly considered. Two social welfare maximization models for optimizing the ring road investment and cordon tolling schemes, a short-sighted and a far-sighted one, are then proposed. In the short-sighted model, the ring road investment decision is first made, and then the cordon tolling scheme is optimized based on the determined ring road locations as candidate cordons. However, in the far-sighted model, a simultaneous decision of the ring road investment and cordon tolling is made. The proposed models explicitly incorporate the estimation of the intra-area travel. A case study applied to the city network of Chengdu China shows that ring road investment and cordon tolling can reshape the urban spatial structure as a result of the tug-of-war between the dispersion effects due to ring road investment and the concentration effects due to cordon tolling. The far-sighted solution entails building more ring roads than the short-sighted solution, and is closer to the social optimum solution. Whether all ring roads are tolled, or just one, the far-sighted solution yields an appreciably higher welfare gain. The optimal single-cordon tolling scheme performs nearly as well as the optimal multi-cordon tolling scheme in terms of the social welfare. Ignoring the household residential relocation behavior leads to underestimates of total cordon toll revenue and welfare gain.