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Equity Effects of Road Pricing, A Review

  • David Levinson


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

Are road pricing strategies regressive or progressive? This is a question that has been confronting researchers, practitioners, and policy-makers who seek to implement new mechanisms to raise funds for transportation while simultaneously managing demand. The theoretical literature is mixed, as is the empirical literature. In part this has to do with the various types of road pricing strategies that are being debated, different definitions of equity, and alternative assumptions about revenue recycling. Despite this seeming complexity, the literature is clear that equity issues are addressable. This paper provides a synthesis of the literature to date on both the theory of equity, as applied to road pricing, and the findings of empirical and simulation studies of the effects of particular implementations of road pricing, and suggested remedies for real or perceived inequities. To summarize, while there are certainly potential issues with equity associated with road pricing, those issues can be addressed with intelligent mechanism design that provides the right incentives to travelers and uses the raised revenues in a way to achieve desired equitable ends. These include cutting other taxes and investing in infrastructure and services.

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Paper provided by University of Minnesota: Nexus Research Group in its series Working Papers with number 201006.

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Date of creation: 2009
Date of revision:
Publication status: Published in Transport Reviews 30(1) 33-57.
Handle: RePEc:nex:wpaper:transportequityreviewpaper
Contact details of provider: Postal: Dept. of Civil Engineering, 500 Pillsbury Drive SE, Minneapolis, MN 55455
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