Pricing, Capacity Choice and Financing in Transportation Networks
This paper explores the inerrelations between pricing, capacity choice and financing in transportation networks. It builds on the famous Mohring-Harwitz result on self-financing of optimally designed roads under optimal congestion pricing, and specifically asks the following questions: (1) to what extent does the result apply under conditions of second-best pricing?; (2) which are the implications of having uncongested (e.g. rural) roads in a network?; and (3) what is the role of fixed (annual) taxes in this context? The paper develops a small network model, with endogenous car-ownership, in order to study these questions both from an analytical and a numerical viewpoint.
|Date of creation:||Aug 2003|
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