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Road pricing with limited information and heterogeneous users: A successful case

Author

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  • Jonas Eliasson

    (Department of Infrastructure and Planning, Royal Institute of Technology, Stockholm and Transek AB, Solna Torg 3, 171 45 Solna, Sweden)

Abstract

Since strictly optimal (first-best) road pricing policies require information that we will probably never have, it is important to investigate what can be done under more restrictive assumptions as to what information is available. One such case is examined in this paper, where the main restrictive assumptions are that all users have the same choice set and that all alternatives have the same monetary cost. Individuals have utility functions with constant marginal utilities of time and money, but these marginal utilities vary across individuals, and are assumed to be unobservable. We show that for this model, any toll reform that reduces aggregate travel time and redistributes the toll revenues equally to all users makes everyone better off. This holds regardless of the distribution of marginal utilities of time and money, and for any road network.

Suggested Citation

  • Jonas Eliasson, 2001. "Road pricing with limited information and heterogeneous users: A successful case," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 35(4), pages 595-604.
    • Handle: RePEc:spr:anresc:v:35:y:2001:i:4:p:595-604
    Note: Received: November 1999/Accepted: July 2001
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    Cited by:

    1. Yang Liu & Xiaolei Guo & Hai Yang, 2009. "Pareto-improving and revenue-neutral congestion pricing schemes in two-mode traffic networks," Netnomics, Springer, vol. 10(1), pages 123-140, April.
    2. Nie, Yu (Marco) & Liu, Yang, 2010. "Existence of self-financing and Pareto-improving congestion pricing: Impact of value of time distribution," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(1), pages 39-51, January.

    More about this item

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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