IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

On Whom the Toll Falls: A Model of Network Financing

Listed author(s):
  • Levinson, David Matthew

This dissertation examines why and how jurisdictions choose to finance theirroads. The systematic causes ofrevenue choice are explored qualitatively by examining the history of turn pikes. The question is approached analytically by employing game theory tomodel revenue choice on a long road. The road is covered by a series of jurisdictions seeking to maximize local welfare. Jurisdictions are responsible for building andmaintaining the local network. Complexity arises because local network usersmay not be localresidents, and localresidentsmay use non-local networks. Key factors posited to explain the choice of revenue mechanism include the length oftrips using the road, the size ofthe governing jurisdiction, the degree of excludability, and the transaction costs oftoll collection. These factors dictate the size and scope of the free rider problem. It is hypothesized thatsmaller jurisdictions and lower collection costsfavortolling policies overtaxes. The analyticalmodel is operationalized by assuming jurisdictions have two decisions: the strategic decision to tax ortoll, and the tactical decision ofsetting the rate of tax ortoll. Models of user demand as a function oftrip distance and monetary cost and of network costs as a function oftraffic flow and the number oftoll collections are specified. The values ofthe constants and coefficients ofthemodel are developed fromrecent cost literature and the estimation of amodel of collection costs from California Toll Bridge data. The model is applied to evaluate the dissertation’s hypotheses. The application evaluatesthe welfare implications of a jurisdiction and its neighborsimposing general tax, cordon toll, odometertax, or perfect toll policies. Sensitivity tests ofthemodel under alternative behavioral assumptions, and with varyingmodel coefficients are conducted. Finally, policy implicationsfromthe analysis are drawn.The general trends which bode well forroad pricing (electronic toll collection (ETC), decentralization, advanced infrastructure, privatization, and federalrules) are established. Possible scenariosforthree cases are presented: deploying ETC and building new tollroads, and converting free roads.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:;origin=repeccitec
Download Restriction: no

Paper provided by University of California Transportation Center in its series University of California Transportation Center, Working Papers with number qt69m1s4gt.

in new window

Date of creation: 01 Apr 1998
Handle: RePEc:cdl:uctcwp:qt69m1s4gt
Contact details of provider: Postal:
109 McLaughlin Hall, Mail Code 1720, Berkeley, CA 94720-1720

Phone: 510-642-3585
Fax: 510-643-3955
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cdl:uctcwp:qt69m1s4gt. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.