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Road Pricing, Traffic Congestion and Economic Welfare: A Note

  • Ingo_Böbel

    (International University of Monaco)

  • Casimir_de_Rham

    (International University of Monaco)

Only recently, the subject of road pricing to reduce traffic congestion gained increasing importance in Europe. This paper uses a standard microeconomic approach to show that road user price charging to avoid traffic congestion is optimal from a society’s point of view as it improves economic efficiency of allocating a scarce resource (road space) by reducing the welfare loss (as being measured by a loss in consumer surplus) for everyone in the society.

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File URL: http://econwpa.repec.org/eps/mic/papers/0411/0411001.zip
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Paper provided by EconWPA in its series Microeconomics with number 0411001.

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Length: 11 pages
Date of creation: 01 Nov 2004
Date of revision:
Handle: RePEc:wpa:wuwpmi:0411001
Note: Type of Document - zip; pages: 11. 11 pages, 8 figures included, zip-file
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Simon Shepherd, 2003. "Towards marginal cost pricing: A comparison of alternative pricing systems," Transportation, Springer, vol. 30(4), pages 411-433, November.
  2. Ingemar Ahlstrand, 2001. "The Politics and Economics of Transport Investment and Pricing in Stockholm," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 35(3), pages 473-489, September.
  3. Chu, Xuehao, 1999. "Alternative congestion pricing schedules," Regional Science and Urban Economics, Elsevier, vol. 29(6), pages 697-722, November.
  4. Charles Raux & Stéphanie Souche, 2004. "The Acceptability of Urban Road Pricing: A Theoretical Analysis Applied to Experience in Lyon," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 38(2), pages 191-215, May.
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