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The London congestion charge: a tentative economic appraisal

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  • Prud'homme, Rémy
  • Bocarejo, Juan Pablo

Abstract

Pre-charge and post-charge data (particularly on speed and road usage) in the London congestion charge zone is used to estimate demand and cost curves for road usage. Pre-charge congestion costs are estimated, and shown to be small (0.1% of the area GDP). They are largely (90%) eliminated by the charge, which produces an economic benefit. Charge proceeds are about three times larger than the value of the congestion. Unfortunately, the yearly amortisation and operation costs of the charge system appear to be significantly higher than the economic benefit produced by the system. The London congestion charge, which is a great technical and political success, seems to be an economic failure. It could be defined as mini Concorde.

Suggested Citation

  • Prud'homme, Rémy & Bocarejo, Juan Pablo, 2005. "The London congestion charge: a tentative economic appraisal," Transport Policy, Elsevier, vol. 12(3), pages 279-287, May.
    • Handle: RePEc:eee:trapol:v:12:y:2005:i:3:p:279-287
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