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Road Pricing with Optimal Mass Transit

Author

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  • Marvin Kraus

    (Boston College)

Abstract

This paper asks the question, "How should the level of mass transit service be adjusted when road pricing is introduced for a substitute auto mode?" The reference point for the introduction of road pricing is second-best optimization in transit. Because this involves below- marginal-cost pricing in transit, it is efficient for road pricing to be accompanied by an increase in the transit fare and a reduction in service. This runs counter to the usual view of using the toll revenue generated by road pricing to provide a higher level of transit service.

Suggested Citation

  • Marvin Kraus, 2011. "Road Pricing with Optimal Mass Transit," Boston College Working Papers in Economics 771, Boston College Department of Economics, revised 15 Apr 2012.
  • Handle: RePEc:boc:bocoec:771
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    File URL: http://fmwww.bc.edu/EC-P/wp771.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Zhu, Zheng & Xu, Ailing & He, Qiao-Chu & Yang, Hai, 2021. "Competition between the transportation network company and the government with subsidies to public transit riders," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    3. Loder, Allister & Bliemer, Michiel C.J. & Axhausen, Kay W., 2022. "Optimal pricing and investment in a multi-modal city — Introducing a macroscopic network design problem based on the MFD," Transportation Research Part A: Policy and Practice, Elsevier, vol. 156(C), pages 113-132.
    4. Wang, Wei (Walker) & Wang, David Z.W. & Zhang, Fangni & Sun, Huijun & Zhang, Wenyi & Wu, Jianjun, 2017. "Overcoming the Downs-Thomson Paradox by transit subsidy policies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 95(C), pages 126-147.
    5. David, Quentin & Kilani, Moez, 2022. "Transport policies in polycentric cities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 101-117.
    6. Lehe, Lewis J., 2020. "Winners and losers from road pricing with heterogeneous travelers and a mixed-traffic bus alternative," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 432-446.
    7. de Palma, André & Kilani, Moez & Proost, Stef, 2015. "Discomfort in mass transit and its implication for scheduling and pricing," Transportation Research Part B: Methodological, Elsevier, vol. 71(C), pages 1-18.
    8. Beaudoin, Justin & Farzin, Y. Hossein & Lin Lawell, C.-Y. Cynthia, 2015. "Public transit investment and sustainable transportation: A review of studies of transit's impact on traffic congestion and air quality," Research in Transportation Economics, Elsevier, vol. 52(C), pages 15-22.
    9. Zhang, Fangni & Yang, Hai & Liu, Wei, 2014. "The Downs–Thomson Paradox with responsive transit service," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 244-263.
    10. You-Zhi Zeng & Bin Ran & Ning Zhang & Xiaobao Yang & Jia-Jun Shen & She-Jun Deng, 2018. "Optimal Pricing and Service for the Peak-Period Bus Commuting Inefficiency of Boarding Queuing Congestion," Sustainability, MDPI, vol. 10(10), pages 1-14, September.
    11. Lindsey, Robin, 2012. "Road pricing and investment," Economics of Transportation, Elsevier, vol. 1(1), pages 49-63.
    12. Takayama, Yuki & Kuwahara, Masao, 2016. "Scheduling preferences, parking competition, and bottleneck congestion: A model of trip timing and parking location choices by heterogeneous commuters," MPRA Paper 68938, University Library of Munich, Germany.
    13. Palma, Andre de & Lindsey, Robin & Monchambert, Guillaume, 2016. "Optimal Transit Pricing with Crowding and Traffic Congestion: A Dynamic Equilibrium Analysis," 57th Transportation Research Forum (51st CTRF) Joint Conference, Toronto, Ontario, May 1-4, 2016 319276, Transportation Research Forum.
    14. Hayakawa, Keiichiro & Chikaraishi, Makoto, 2023. "Modeling the impact of e-hailing services on regional public transit considering transit-dependent people," Transportation Research Part B: Methodological, Elsevier, vol. 170(C), pages 91-118.

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    More about this item

    Keywords

    congestion pricing; road pricing;

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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