Which consumers benefit from congestion tolls?
Consider a consumer who can choose to travel on a congestible fast mode or on a congestible slow mode. Users who most value time will use the fast mode. A toll on the slow mode can induce some people who initially use that mode to switch to the fast mode. A toll on the slow mode with revenue not returned to users then necessarily reduces the welfare of all users. A toll on the fast mode may raise aggregate consumer surplus.
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- Small, K.A. & Gomez-Ibanez, J.A., 1996.
95-96-4, California Irvine - School of Social Sciences.
- Niskanen, Esko, 1987. "Congestion tolls and consumer welfare," Transportation Research Part B: Methodological, Elsevier, vol. 21(2), pages 171-174, April.
- F. H. Knight, 1924. "Some Fallacies in the Interpretation of Social Cost," The Quarterly Journal of Economics, Oxford University Press, vol. 38(4), pages 582-606.
- Layard, Richard, 1977. "The Distributional Effects of Congestion Taxes," Economica, London School of Economics and Political Science, vol. 44(175), pages 297-304, August.
- Glazer, Amihai, 1981. "Congestion Tolls and Consumer Welfare," Public Finance = Finances publiques, , vol. 36(1), pages 77-83.
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