Congestion tolls and parking fees: A comparison of the potential effect on travel behavior

This paper presents a comparison of attitudes towards congestion and parking tolls and explores their effect on travel behavior. The findings indicate that drivers are sensitive mainly to congestion tolls and are willing to change their travel habits to avoid these tolls. The major effect of a congestion toll is the shifting of the time of the journey. High levels of demand elasticity (−1.8 for congestion tolls and −1.2 for parking fees) were found. The readiness to pay parking fees is greater; thus, the effectiveness of congestion tolls in reducing demand is higher during the times the tolls apply.     

Estimates of price elasticity of demand for urban freeway use with high-frequency control variables: the case of Santiago,Chile

Estimates are presented of toll and fuel price elasticities of demand for urban freeway use in Santiago, Chile. High-frequency toll and vehicle data were collected from four urban freeways for different route segments and times of day. Estimation was performed using log-linear regression models whose explanatory variables were tolls, fuel prices, city traffic levels and sets of dichotomous variables to control for daily, weekly and monthly seasonality. City traffic is a high frequency control of the activity level of the city. The elasticities to changes in tolls and fuel were all low in absolute value. The toll elasticities were below 0.05 for two freeways and 0.16 for the third, while for the fourth, which had more alternative routes, it was 0.47. The fuel price elasticities were also heterogeneous, with values of approximately 0.45 for two freeways and 0.21 for the third whereas for the fourth, which had the fewest alternatives, it was 0.07.     

An endogenous equilibrium game on traffic congestion externalities

Traffic congestion and road tolls are familiar economic concepts for most undergraduates; however, students often have difficulty explaining exactly how theoretical principles like externalities and social welfare are related to their real-world experiences, such as driving. The authors present a classroom exercise to demonstrate how congestion externalities are generated, the effects on private and social welfare, and how appropriately priced tolls can address congestion externalities. Students are asked to evaluate outcomes in five different driving scenarios, with and without congestion or tolls. The authors offer discussion questions to make the activity engaging and informative. They report the results of their efforts to administer the exercise. This 75-minute exercise is appropriate for introductory or intermediate microeconomics, political economy, or environmental economics classes of various sizes.     

Winners and losers in tolled motorway renegotiations: an empirical evaluation of the Spanish pioneers

This paper evaluates the welfare impact of a tolled motorway contract renegotiation in Spain. The results show that, after renegotiation, both taxpayers and the private concessionaire were better off. However, road users lost out. An agreement leaving road users unaffected, while securing gains for taxpayers and the concessionaire, would have been possible by negotiating a larger reduction in tolls linked to the extension of the contract duration.     

TWO DECADES OF DBFO ROADS IN THE UK AND SPAIN: AN EVALUATION OF THE FINANCIAL PERFORMANCE

Road schemes are of major importance in the global PPP market. We focus on Design‐Build‐Finance‐Operate (DBFO) arrangements covered by shadow toll or availability payment mechanisms, where the UK and Spain are key players. Now that a good number of DBFO schemes in the UK and Spain have been operational for well over half the contract period, there is scope for a detailed ex post evaluation of DBFO performance in both countries and an analysis of how the DBFO model has evolved. Preliminary results show that these contracts continue to be very expensive for public administrations, especially in the UK, where the financing costs and fee per kilometre are high. On the other hand, they are an easy source of revenue for the parent companies of the concessionaires, where the increased use of subordinated debt rather than equity seeks to reduce risk. However, despite circumventing the controversial hard‐tolling, some projects in both Spain and the UK present poor outcomes. Several other problems around these projects are identified, including lack of public accountability and transparency or poor governance, raising long‐term questions around affordability and opportunities for further study.