IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/hal-01397582.html
   My bibliography  Save this paper

Tolls Versus Mobility Permits: A Comparative Analysis

Author

Listed:
  • André De Palma

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Stef Proost

    () (Department of Economics, KU Leuven)

  • Ravi Seshadri

    (Singapore-MIT Alliance for Research and Technology (SMART) Centre)

  • Moshe Ben-Akiva

    (MIT - Massachusetts Institute of Technology)

Abstract

To address traffic congestion, two categories of instruments are used: price regulation (for instance, road pricing or congestion tolling) and quantity regulation (credit-based mobility schemes). Although the comparison of price and quantity regulation has received significant attention in the economics community, the literature is relatively sparse in the context of transportation systems. This paper develops a methodology to compare the toll and mobility permit instruments using a simple transportation network consisting of parallel highway routes and a public transport alternative. The permits can be traded across roads. The demand for each route is determined by a mixed logit route choice model and the supply consists of static congestion. The comparison is based on the optimum social welfare which is computed for each instrument by solving a non-convex optimization problem involving the mixed logit equilibrium constraints. Equity considerations are also examined. Numerical experiments conducted across a wide range of demand/supply inputs indicate that the toll and mobility permit instruments perform very closely in efficiency terms. The permit system is on average more efficient, but only by a small margin.

Suggested Citation

  • André De Palma & Stef Proost & Ravi Seshadri & Moshe Ben-Akiva, 2016. "Tolls Versus Mobility Permits: A Comparative Analysis," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01397582, HAL.
  • Handle: RePEc:hal:cesptp:hal-01397582
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01397582
    as

    Download full text from publisher

    File URL: https://hal.archives-ouvertes.fr/hal-01397582/document
    Download Restriction: no

    References listed on IDEAS

    as
    1. Hideo Konishi, 2004. "Uniqueness of User Equilibrium in Transportation Networks with Heterogeneous Commuters," Transportation Science, INFORMS, vol. 38(3), pages 315-330, August.
    2. Martin L. Weitzman, 1974. "Prices vs. Quantities," Review of Economic Studies, Oxford University Press, vol. 41(4), pages 477-491.
    3. Carlos F. Daganzo, 1983. "Stochastic Network Equilibrium with Multiple Vehicle Types and Asymmetric, Indefinite Link Cost Jacobians," Transportation Science, INFORMS, vol. 17(3), pages 282-300, August.
    4. De Borger, Bruno & Proost, Stef, 2012. "A political economy model of road pricing," Journal of Urban Economics, Elsevier, vol. 71(1), pages 79-92.
    5. Fan, Wenbo & Jiang, Xinguo, 2013. "Tradable mobility permits in roadway capacity allocation: Review and appraisal," Transport Policy, Elsevier, vol. 30(C), pages 132-142.
    6. Parry, Ian W H & Bento, Antonio, 2001. " Revenue Recycling and the Welfare Effects of Road Pricing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(4), pages 645-671, December.
    7. E Verhoef & P Nijkamp & P Rietveld, 1997. "Tradeable permits: their potential in the regulation of road transport externalities," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 24(4), pages 527-548, July.
    8. Robin Lindsey, 2004. "Existence, Uniqueness, and Trip Cost Function Properties of User Equilibrium in the Bottleneck Model with Multiple User Classes," Transportation Science, INFORMS, vol. 38(3), pages 293-314, August.
    9. Roberts, Marc J. & Spence, Michael, 1976. "Effluent charges and licenses under uncertainty," Journal of Public Economics, Elsevier, vol. 5(3-4), pages 193-208.
    10. Jean Jacques Laffont, 1977. "More on Prices vs. Quantities," Review of Economic Studies, Oxford University Press, vol. 44(1), pages 177-182.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Social Welfare; Mixed Logit; Tolls; Mobility Permits; Equity; Stochastic Demand;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:hal-01397582. 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: (CCSD). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.