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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.

Suggested Citation

  • Ingo_Böbel & Casimir_de_Rham, 2004. "Road Pricing, Traffic Congestion and Economic Welfare: A Note," Microeconomics 0411001, EconWPA.
  • Handle: RePEc:wpa:wuwpmi:0411001
    Note: Type of Document - zip; pages: 11. 11 pages, 8 figures included, zip-file

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    References listed on IDEAS

    1. Chu, Xuehao, 1999. "Alternative congestion pricing schedules," Regional Science and Urban Economics, Elsevier, vol. 29(6), pages 697-722, November.
    2. Simon Shepherd, 2003. "Towards marginal cost pricing: A comparison of alternative pricing systems," Transportation, Springer, vol. 30(4), pages 411-433, November.
    3. Ingemar Ahlstrand, 2001. "The Politics and Economics of Transport Investment and Pricing in Stockholm," Journal of Transport Economics and Policy, University of Bath, vol. 35(3), pages 473-489, September.
    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, University of Bath, vol. 38(2), pages 191-215, May.
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    More about this item


    Road pricing; Tragedy of the Commons; Economic Welfare;

    JEL classification:

    • D - Microeconomics
    • D - Microeconomics

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