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Estimating welfare effects of congestion charges in real world settings

Author

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  • Börjesson, Maria

    () (KTH)

  • Kristoffersson, Ida

    (KTH)

Abstract

According to the standard textbook analysis, drivers as a group will be worse off with congestion charging if not compensated by revenues. This result is confirmed by an analysis of the Stockholm congestion charging scheme using a static model with homogeneous users. However, both this static model and the standard textbook analysis omit three important factors: taste heterogeneity, effects of charges on the larger network arising from less blocking back of upstream links and the possibility for drivers to reschedule. Taking account of these factors, using a dynamic scheduling model with heterogeneous users estimated and calibrated for Stockholm, we find that drivers as a group benefit from the charging scheme in Stockholm without recycling of revenues. This paper further investigates the importance of the three mentioned factors. We find that all three factors add significantly to the benefit of the charges and that the most important is heterogeneity in the value of travel time savings. This paper also provides an update on the consumer benefits of the Stockholm charges.

Suggested Citation

  • Börjesson, Maria & Kristoffersson, Ida, 2012. "Estimating welfare effects of congestion charges in real world settings," Working papers in Transport Economics 2012:13, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
  • Handle: RePEc:hhs:ctswps:2012_013
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    File URL: http://www.transportportal.se/SWoPEc/CTS2012-13.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. van den Berg, Vincent A.C., 2014. "Coarse tolling with heterogeneous preferences," Transportation Research Part B: Methodological, Elsevier, vol. 64(C), pages 1-23.
    2. van den Berg, Vincent A.C., 2012. "Step-tolling with price-sensitive demand: Why more steps in the toll make the consumer better off," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(10), pages 1608-1622.
    3. Eliasson, Jonas & Börjesson, Maria & van Amelsfort, Dirk & Brundell-Freij, Karin & Engelson, Leonid, 2013. "Accuracy of congestion pricing forecasts," Transportation Research Part A: Policy and Practice, Elsevier, vol. 52(C), pages 34-46.

    More about this item

    Keywords

    Congestion charges; Road pricing; Acceptability; Evaluation; Urban transport policy; Transport externalities;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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