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The Welfare Effects Of Congestion Tolls With Heterogeneous Commuters

Author

Listed:
  • Richard Arnott

    (Department Of Economics, Boston College)

  • Andre de Palma

    (University Of Geneva)

  • Robin Lindsey

    (University Of Alberta)

Abstract

Recent success in introducing road pricing, as well as recent polls suggest that road pricing schemes are politically viable if a large majority of drivers benefit. In this paper we analyze the welfare effects of an optimal time-varying toll impose during the morning commute. The toll tends to benefit drivers with high unit values of travel time and schedule delay. Other drivers can become worse off even with an equal per-capita rebate. A capacity expansion benefits drivers in proportion to their trip costs. If initial capacity is sufficiently small, a toll-financed expansion leaves all drivers better off.

Suggested Citation

  • Richard Arnott & Andre de Palma & Robin Lindsey, 1993. "The Welfare Effects Of Congestion Tolls With Heterogeneous Commuters," Boston College Working Papers in Economics 231, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:231
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    Cited by:

    1. Martin Koning, 2010. "The Social Cost of Road Congestion in Ile-de-France Region (and France): Empirical Evidences from the Paris Ring-Road," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00467888, HAL.
    2. Daniel Albalate & Germa Bel, 2008. "Shaping urban traffic patterns through congestion charging: What factors drive success or failure?," IREA Working Papers 200801, University of Barcelona, Research Institute of Applied Economics, revised Jan 2008.
    3. Wuping Xin & David Levinson, 2015. "Stochastic Congestion and Pricing Model with Endogenous Departure Time Selection and Heterogeneous Travelers," Mathematical Population Studies, Taylor & Francis Journals, vol. 22(1), pages 37-52, March.
    4. Fosgerau, Mogens & de Palma, André, 2012. "Congestion in a city with a central bottleneck," Journal of Urban Economics, Elsevier, vol. 71(3), pages 269-277.
    5. André de Palma & Néjia Zaouali, 2007. "Monétarisation des externalités de transport : un état de l'art," THEMA Working Papers 2007-08, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    6. Engel Eduardo M & Fischer Ronald & Galetovic Alexander, 2004. "Toll Competition Among Congested Roads," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-21, March.
    7. Börjesson, Maria & Eliasson, Jonas & Hugosson, Muriel & Brundell-Freij, Karin, 2012. "The Stockholm congestion charges – five years on. Effects, acceptability and lessons learnt," Working papers in Transport Economics 2012:3, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    8. Richard Arnott, 1997. "Congestion Tolling and Urban Spatial Structure," Boston College Working Papers in Economics 389., Boston College Department of Economics.
    9. Ian W. H. Parry & Margaret Walls & Winston Harrington, 2007. "Automobile Externalities and Policies," Journal of Economic Literature, American Economic Association, vol. 45(2), pages 373-399, June.
    10. Ch'ng, Kean Siang, 2010. "Individual tradable permit market and traffic congestion: An experimental study," MPRA Paper 26638, University Library of Munich, Germany.
    11. Lisa Schweitzer & Brian Taylor, 2008. "Just pricing: the distributional effects of congestion pricing and sales taxes," Transportation, Springer, vol. 35(6), pages 797-812, November.
    12. Christelle Viauroux, 2007. "Optimal pricing of endogenous congestion: a disaggregated approach," UMBC Economics Department Working Papers 09-107, UMBC Department of Economics, revised 17 Jul 2009.
    13. Timilsina, Govinda R. & Dulal, Hari B., 2008. "Fiscal policy instruments for reducing congestion and atmospheric emissions in the transport sector : a review," Policy Research Working Paper Series 4652, The World Bank.
    14. Romeo Danielis & Edoardo Marcucci, 1999. "Bottleneck Congestion and Modal Split Revisited," Working Papers 1999.5, Fondazione Eni Enrico Mattei.

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