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Long-Term Consequences of Congestion Pricing: A Small Cordon in the Hand Is Worth Two in the Bush

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Listed:
  • Safirova, Elena A.

    (Resources for the Future)

  • Houde, Sébastien

    (Resources for the Future)

  • Coleman, Conrad T.

    (Resources for the Future)

  • Harrington, Winston

    (Resources for the Future)

  • Lipman, D. Abram

Abstract

We evaluate and compare the long-term economic effects of three cordon-based road pricing schemes applied to the Washington, DC, metropolitan area. To conduct this analysis, we employ a spatially disaggregated general equilibrium model of a regional economy that incorporates the decisions of residents, firms, and developers, integrated with a spatially disaggregated strategic transportation planning model that features mode, time period, and route choice. We find that all cordon pricing schemes increase welfare of the residents, as well as lead to GDP growth. At the optimum, the larger cordon and a double cordon lead to higher benefits than the small cordon encompassing downtown core. Nevertheless, the small cordon seems to be a safer bet because when the toll charge is set suboptimally, the net benefits from the small cordon compared to the optimum change negligibly, while the net benefits from the larger cordon decline sharply as the charge deviates from the optimal level.

Suggested Citation

  • Safirova, Elena A. & Houde, Sébastien & Coleman, Conrad T. & Harrington, Winston & Lipman, D. Abram, 2006. "Long-Term Consequences of Congestion Pricing: A Small Cordon in the Hand Is Worth Two in the Bush," RFF Working Paper Series dp-06-42, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-06-42
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-06-42.pdf
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    References listed on IDEAS

    as
    1. Anas, Alex & Xu, Rong, 1999. "Congestion, Land Use, and Job Dispersion: A General Equilibrium Model," Journal of Urban Economics, Elsevier, vol. 45(3), pages 451-473, May.
    2. Mun, Se-il & Konishi, Ko-ji & Yoshikawa, Kazuhiro, 2003. "Optimal cordon pricing," Journal of Urban Economics, Elsevier, vol. 54(1), pages 21-38, July.
    3. Georgina Santos, 2004. "Urban Congestion Charging: A Second-Best Alternative," Journal of Transport Economics and Policy, University of Bath, vol. 38(3), pages 345-369, September.
    4. Georgina Santos, 2008. "The London Congestion Charging Scheme, 2003–2006," Chapters, in: Harry W. Richardson & Chang-Hee Christine Bae (ed.), Road Congestion Pricing in Europe, chapter 8, Edward Elgar Publishing.
    5. Small, Kenneth A. & Gomez-Ilbanez, Jose A., 1998. "Road Pricing for Congestion Management: The Transition from Theory to Policy," University of California Transportation Center, Working Papers qt8kk909p1, University of California Transportation Center.
    6. Safirova, Elena A. & Houde, Sébastien & Lipman, D. Abram & Harrington, Winston & Bagliano, Andrew D., 2006. "Congestion Pricing: Long-Term Economic and Land-Use Effects," RFF Working Paper Series dp-06-37, Resources for the Future.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    traffic congestion; cordon tolls; land use; welfare analysis; road pricing; general equilibrium; simulation; Washington DC;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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