IDEAS home Printed from https://ideas.repec.org/p/nex/wpaper/delayerpays.html
   My bibliography  Save this paper

Delayer Pays Principle: Examining Congestion Pricing with Compensation

Author

Listed:
  • David Levinson

    () (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)

  • Peter Rafferty

Abstract

Despite its virtues, congestion pricing has yet to be widely adopted. This paper explores the issues of equity and use of toll revenue and several possible alternatives. The equity and efficiency problems of conventional (uncompensated) congestion pricing are outlined. Then, several alternatives are discussed and developed. A new compensation mechanism is developed, called the delayer pays principle. This principle ensures that those who arecause delay to others pay a toll to compensate those who are delayed. We evaluate the effectiveness of this idea by simulating alternative tolling approaches and evaluating the results across several measures, including delay, social cost, consumer surplus, and equity. Different tolling approaches can satisfy widely varying policy objectives, thus this principle is applicable in diverse situations. Such a system is viable and can eliminate some common hurdles of congestion pricing while remaining revenue neutral.

Suggested Citation

  • David Levinson & Peter Rafferty, 2004. "Delayer Pays Principle: Examining Congestion Pricing with Compensation," Working Papers 200407, University of Minnesota: Nexus Research Group.
  • Handle: RePEc:nex:wpaper:delayerpays
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/11299/179916
    File Function: First version, 2007
    Download Restriction: no

    References listed on IDEAS

    as
    1. Braid, Ralph M., 1996. "Peak-Load Pricing of a Transportation Route with an Unpriced Substitute," Journal of Urban Economics, Elsevier, vol. 40(2), pages 179-197, September.
    2. Arnott, R. & De Palma, A. & Lindseyt, R., 1995. "Recent Developments in the Bottleneck Model," Papers 9523, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
    3. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-260, May.
    4. Fielding, Gordon J. & Klein, Daniel B., 1993. "How To Franchise Highways," University of California Transportation Center, Working Papers qt79z9x6fs, University of California Transportation Center.
    5. Verhoef, Erik & Nijkamp, Peter & Rietveld, Piet, 1996. "Second-Best Congestion Pricing: The Case of an Untolled Alternative," Journal of Urban Economics, Elsevier, vol. 40(3), pages 279-302, November.
    6. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1993. "A Structural Model of Peak-Period Congestion: A Traffic Bottleneck with Elastic Demand," American Economic Review, American Economic Association, vol. 83(1), pages 161-179, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ch'ng, Kean Siang, 2010. "Individual tradable permit market and traffic congestion: An experimental study," MPRA Paper 26638, University Library of Munich, Germany.
    2. Ivanov, Nikola & Netjasov, Fedja & Jovanović, Radosav & Starita, Stefano & Strauss, Arne, 2017. "Air Traffic Flow Management slot allocation to minimize propagated delay and improve airport slot adherence," Transportation Research Part A: Policy and Practice, Elsevier, vol. 95(C), pages 183-197.
    3. Jovanović, Radosav & Tošić, Vojin & Čangalović, Mirjana & Stanojević, Milan, 2014. "Anticipatory modulation of air navigation charges to balance the use of airspace network capacities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 61(C), pages 84-99.
    4. Janusch, Nicholas, 2016. "A note on the distortionary effects of revenue-neutral tolls in a bottleneck congestion game," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 95-103.
    5. Tyler Patterson & David Levinson, 2008. "Lexus Lanes or Corolla Lanes? Spatial Use and Equity Patterns on the I-394 MnPASS Lanes," Working Papers 000051, University of Minnesota: Nexus Research Group.

    More about this item

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • D10 - Microeconomics - - Household Behavior - - - General
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

    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:nex:wpaper:delayerpays. 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: (David Levinson). General contact details of provider: http://edirc.repec.org/data/nexmnus.html .

    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.