Pricing, Investment, and Network Equilibrium
Despite rapidly emerging innovative road pricing and investment principles, the development of a long run network dynamics model for necessary policy evaluation is still lagging. This research endeavors to fill this gap and models the impacts of road financing policies throughout the network equilibration process. The manner in which pricing and investment jointly shape network equilibrium is particularly important and explored in this study. The interactions among travel demand, road supply, revenue mechanisms and investment rules are modeled at the link level in a network growth simulator. After assessing several measures of effectiveness, the proposed network growth model is able to evaluate the short- and long-run impacts of a broad spectrum of road pricing and investment policies on large-scale road networks, which can provide valuable information to decision-makers such as the implications of various policy scenarios on social welfare, financial situation of road authorities and potential implementation problems. Some issues hard to address in theoretical analysis can be examined in the agent-based simulation model. As a demonstration, we apply the network growth model to assess marginal and average pricing scenarios on a sample network. Even this relatively simple application provides new insights into issues around road pricing that have not previously been seriously considered. For instance, the results disclose a potential problem of over-investment when the marginal cost pricing scheme is adopted in conjunction with a myopic profit-neutral investment policy.
|Date of creation:||2004|
|Date of revision:|
|Publication status:||Published in working paper|
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- Small, Kenneth A., 1992.
"Using the Revenues from Congestion Pricing,"
University of California Transportation Center, Working Papers
qt32p9m3mm, University of California Transportation Center.
- Small, Kenneth A., 2001. "Using the Revenues from Congestion Pricing," University of California Transportation Center, Working Papers qt7170x9b0, University of California Transportation Center.
- David Levinson & David Gillen, 1997. "The Full Cost of Intercity Highway Transportation," Working Papers 199704, University of Minnesota: Nexus Research Group.
- Daganzo, Carlos F., 1995. "A pareto optimum congestion reduction scheme," Transportation Research Part B: Methodological, Elsevier, vol. 29(2), pages 139-154, April.
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