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Effects of Gateway Congestion Pricing on Optimal Road Pricing and Hinterland

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  • Andrew Yuen
  • Leonardo J. Basso
  • Anming Zhang

Abstract

This paper investigates the effects of congestion pricing implemented at a gateway (port or airport) on its hinterland's optimal road pricing, road congestion and social welfare. We find that if the gateway maximises the joint profit of itself and its oligopoly carriers, its charge will rise, with part of this increase owing to congestion pricing. This increase in the gateway charge will lead to lower road tolls, independent of whether the road price discriminates between local and transit traffic (from or to the gateway). However, while the change in road congestion is in general ambiguous, the hinterland's welfare will fall as a result of the increase in the gateway charge. © 2008 LSE and the University of Bath

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  • Andrew Yuen & Leonardo J. Basso & Anming Zhang, 2008. "Effects of Gateway Congestion Pricing on Optimal Road Pricing and Hinterland," Journal of Transport Economics and Policy, University of Bath, vol. 42(3), pages 495-526, September.
  • Handle: RePEc:tpe:jtecpo:v:42:y:2008:i:3:p:495-526
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    Cited by:

    1. Czerny, Achim & Höffler, Felix & Mun, Se-il, 2014. "Hub port competition and welfare effects of strategic privatization," Economics of Transportation, Elsevier, vol. 3(3), pages 211-220.
    2. van den Berg, Vincent A.C., 2013. "Serial private infrastructures," Transportation Research Part B: Methodological, Elsevier, vol. 56(C), pages 186-202.
    3. Yuen, Chi-lok Andrew & Zhang, Anming & Cheung, Waiman, 2012. "Port competitiveness from the users' perspective: An analysis of major container ports in China and its neighboring countries," Research in Transportation Economics, Elsevier, vol. 35(1), pages 34-40.
    4. De Borger, Bruno & Proost, Stef, 2012. "Transport policy competition between governments: A selective survey of the literature," Economics of Transportation, Elsevier, vol. 1(1), pages 35-48.
    5. Chen, Hsiao-Chi & Liu, Shi-Miin, 2016. "Should ports expand their facilities under congestion and uncertainty?," Transportation Research Part B: Methodological, Elsevier, vol. 85(C), pages 109-131.
    6. Álvarez-SanJaime, Óscar & Cantos-Sánchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, José J., 2015. "The impact on port competition of the integration of port and inland transport services," Transportation Research Part B: Methodological, Elsevier, vol. 80(C), pages 291-302.
    7. Yuen, Andrew & Zhang, Anming & Hui, Yer Van & Leung, Lawrence C. & Fung, Michael, 2017. "Is developing air cargo airports in the hinterland the way of the future?," Journal of Air Transport Management, Elsevier, vol. 61(C), pages 15-25.

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