Viability of a New Road Infrastructure with Heterogeneous Users in Madrid Access
This paper explores the importance of heterogeneity in value of time when assessing the viability of a new road infrastructure to alleviate congestion problems. The Spanish government has developed a congestion pricing demonstration entering Madrid city centre, where road users have to choose between a free but highly congested road and a priced free-flowing road. We consider a continuum of users who differ in their value of time. Users dislike congestion and this is more so the more a user values his travel time. A logit estimation is undertaken with information from a questionnaire among road users in the Eastern Madrid area to obtain users' value of time. The impact and viability of artery road R3 under several competitive regimes is examined. The tolls obtained generate a traffic reallocation towards the new roadway such that revenues suffice to render the infrastructure socio-economically viable. This is so for all the competitive regimes analyzed even for modest traffic growth rates. Regarding economic viability, the artery road infrastructure is always economically viable under the private regime and for the other two regimes, a sufficiently high traffic growth rate is required.
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