Willingness to spend and road pricing rates

Using a theoretical model of urban transport system the paper examines the influence of distribution of willingness to spend within the urban population on road pricing rates. It shows that the rates that must be imposed in an urban area in order to maintain pollutant concentration and congestion due to traffic within acceptable levels is heavily dependent on the distribution of the urban population’s willingness to spend. This fact severely limits the reliability of any method for calculating road pricing rates based on theoretical analysis, so that an experimental approach seems necessary. The paper shows that a relation exists between the toll rate per kilometer of trip and the average traffic congestion, which is typical of each urban area and can be determined experimentally by successively imposing three different rates and measuring the corresponding congestion levels. The relation can then be used to determine the pricing scheme when the purpose of road pricing is to maintain both the congestion and the environmental effects due to urban traffic below acceptable thresholds. An example shows how the model can help policymakers in decision-making processes.     

Bounding the efficiency of road pricing

This paper deals with the following question associated with congestion pricing in a general network with either fixed or elastic travel demand: what is the maximum efficiency loss of a general second-best pricing scheme due to inexact marginal-cost pricing in comparison with the first-best pricing or system optimum case? A formal answer to this question is provided by establishing an inefficiency bound associated with a given road pricing scheme. An application of the methods is provided for the practical trial-and-error implementation of marginal-cost pricing with unknown demand functions.     

Local authority and academic attitudes to urban road pricing: a UK perspective

Urban road pricing as an instrument of traffic management has generated a great deal of interest in the UK in recent years. Whilst this is the case there is still no urban road pricing scheme in operation in the UK. The reason for this is primarily one of ‘acceptability.’ This paper, through the use of a national survey, examines the attitudes of key stakeholder groups with respect to urban road pricing. How serious is traffic congestion and traffic related pollution perceived to be by Local Authority Councillors, Officials and the Academic community in the UK? How is urban road pricing viewed by this sub-group of the population in terms of its effectiveness and public acceptance when compared to other policy options? and how could the saleability of urban road pricing be improved? This raises issues in terms of how the revenue raised from urban road pricing should be utilised, the use of urban road pricing as part of a package of measures, the concerns expressed by the stakeholders with respect to urban road pricing, such as the invasion of road users’ privacy, and the type of technology which should be considered. Overall, the paper aims to further the debate among policy makers.     

Research challenges in modelling urban road pricing: An overview

This article introduces the contributions of this special issue on modelling of urban road pricing and its implementation. The issue focuses on the design of urban road pricing schemes, and their spatial and temporal impacts, using quantitative transport (and land use) models. The policy implications of road pricing, including welfare and equity aspects, are studied for Paris, Brussels and Oslo using state of the art planning models. The issue is completed with a study of public acceptability and the upcoming road-pricing trial in Stockholm, and a review paper on the history of thought and future prospects of road pricing.     

Modelling and evaluation of road pricing in Paris

This article describes the impacts of road pricing in Ile-de-France, a region that includes Paris. The morning peak is studied using METROPOLIS: a dynamic network simulator that treats endogenously travellers' mode, departure time and route-choice decisions. Time-independent tolls on selected links, time-varying cordon tolls, and a network-wide toll proportional to travel time are considered. Welfare gains from the link and cordon tolls are relatively small. The comprehensive travel-time-based toll yields much higher benefits. In all cases, benefits to users amount to a large fraction of toll revenues and exceed the monetised value of reductions in noise, accidents and vehicle emissions.     

History of thought and prospects for road pricing

Policy implications of the research program presented in this issue of Transport Policy are discussed according to their theoretical, historical and political origins. Problems related to government taxation are analysed in the light of the early literature on transport externalities pricing that began with Pigou [Pigou, A.C., 1920. The Economics of Welfare. MacMillan, London. (References are usually made to the 1932, 4th ed.)]. We then discuss decision-making processes in transport pricing implementation involving redistribution issues, acceptability, user's satisfaction and equity. The article also briefly reviews the general agenda of EU transport policy     

Determinants of private car users' acceptance of road pricing

The study investigates determinants of private car users' acceptance of road pricing. A model specifying the strength and direction of causal paths between latent theoretical variables was estimated for data from a survey of 524 car owners living in a metropolitan area of Sweden. The estimated model showed that acceptance of road pricing is negatively affected by perceived infringement on freedom and unfairness which in turn increase with intentions to reduce car use. Income is negatively and expectations that others will reduce car use positively related to intentions to reduce car use.     

Price regulation of airports: principles with Australian applications

This paper analyses the various issues that are likely to arise with price regulation of privately owned airports. It begins with a brief background on Australian airports, and a review of regulatory experience elsewhere. Issues which can create problems for price regulation include congestion, noise and other externalities, quality degradation and underinvestment, and the choice of the initial price level. Price regulation limits the use of prices as rationing devices where congestion is present. Efficient handling of congestion can be reconciled with price caps if the regulator determines the appropriate congestion/capacity trade off, and supervises allocation of slots, e.g. through auctions or creating a market for slots. Noise externalities can be handled through noise charges set by a regulator who may also be called upon to resolve capacity/noise trade offs. Resolving the problem of quality degradation and underinvestment is inherently difficult, and may need to involve active participation in investment decisions by the regulator and airlines. The difficulties of setting initial price levels arise from conflicts in ensuring that existing assets are utilised efficiently, and that prices give efficient signals for future investment. Regulatory design issues, dealing with whether pure price caps or mixed regulatory rules are superior, are examined in the airport context. The paper concludes with a brief examination of the price regulatory regime as announced by the Australian government.     

Modeling politicians' preferences for road pricing policies: A regret-based and utilitarian perspective

This paper presents the results of a stated choice-study among Dutch local politicians in the context of road pricing policies. Politicians were asked to express their preferences for policy-options that differed in terms of (i) emissions reduction, (ii) congestion reduction, (iii) operational costs, (iv) acceptability among the general public and (v) acceptability among retailers. Utility-maximization-based and regret-minimization-based discrete choice models were estimated, and their results compared, on 238 stated choices made by members of Dutch city-councils. The estimated models allow for the evaluation of the popularity of different road pricing scenarios among Dutch local politicians, as a function of their performance in terms of the above-mentioned criteria.     

From roadkill to road ecology: A review of the ecological effects of roads

Transportation infrastructure affects the structure of ecosystems, the dynamics of ecosystem function, and has direct effects on ecosystem components, including their species composition. Clearly, the construction of transport lines results in the direct destruction and removal of existing ecosystems, and the reconfiguration of local landforms. However, transportation systems, and more specifically, roads, have a wide variety of primary, or direct, ecological effects as well as secondary, or indirect, ecological effects on the landscapes that they penetrate. The effects of roads can be measured in both abiotic and biotic components of terrestrial and aquatic ecosystems. The nature of road systems as network structures renders vast areas of the landscape as road-affected, with small patches of isolated habitat remaining beyond the ecological influence of roads. The increasing attention of scientists to the unintended ecological effects of roads has resulted in the emergence of the science of “Road Ecology,” marked with the publication of a multi-authored volume, Road Ecology: Science and Solutions, in 2003.     

Built environment and potential job accessibility effects of road pricing: A spatial econometric perspective

This paper analyzes the impacts of the built environment (BE) as it relates to the potential job accessibility (PJA) effects of road pricing. The relationships between the BE elements and PJA under a road charging policy are established using a spatial econometric approach, which uses an integrated land use and transportation model (TRANUS model) and a spatial lag model (SLM). With the intent of further analyzing the differences in the PJA effects of road pricing on traffic analysis zones (TAZs) that contain different combinations of BE elements, a quantitative classification method combining factor and cluster analysis is applied. This will quantitatively categorize TAZs inside and outside the tolled areas. In exploring the relationship between changes in PJA and the road pricing policy, we found the spatial autocorrelation coefficient to be negative. This result suggests that we are unable to increase the PJA of all the regions through road pricing, but rather affect a redistribution of PJA between different regions. Results also indicate that the impacts of road charging on PJA are associated with urban BE elements. Moreover, such effects are the common result of specific characteristics of the BE. The higher the number of jobs, the better the public transportation conditions, and the better the street design (high densities of street and intersections), the less the region will be negatively influenced by a road charging policy, and vice versa. To avoid the negative effects of road pricing on PJA prior to the launch of such a policy, cities should improve public transportation networks and enhance the street design of the road pricing policy areas, especially the toll ring periphery area.     

Policy transfer and the introduction of road pricing in Valletta,Malta

Charging motorists to pay for driving at times and/or in places where there is insufficient capacity to meet the level of demand has long been recognised by transport economists as an efficient way to address traffic congestion. However, only a few locations have actually decided to use this mechanism, with Valletta one of the more recent cities to introduce such a scheme. This paper aims to present a case study of road pricing in Valletta and the role played by policy transfer in its introduction. To do this, it applies data gathered from existing literature, in-depth interviews and direct observation with those involved in the policy development. Experience of road pricing was gained from London, Durham, Edinburgh and Stockholm. One of the major barriers to policy transfer was felt to be the unique geography of the island however international events, local conditions and a political champion driving change were critical factors to the successful implementation of the road pricing scheme. Policy transfer was deemed useful in terms of policy development, relations with stakeholders, scheme design and administrative approaches. This paper concludes by identifying the contributions of the case study of Valletta to the policy transfer literature.     

Making urban road pricing acceptable and effective: searching for quality and equity in urban mobility

Urban Road Pricing has been proposed many times as a powerful instrument to fight congestion in urban traffic, but has systematically faced a hostile political envirionment, due to lack of confidence on its promised (traffic) results and fear of its political consequences. Lack of action in this front is contributing to stable or even growing congestion problems in most large cities.This paper tries to address the problem with a fresh look at the objectives of road pricing and at the reasons for that political hostility. For managing and developing the urban mobility system, efficiency and equity are normally taken as the basic economic objectives. Sustainability objectives may be integrated in the efficiency objective if we are able to represent adequately the costs of the resources consumed in the process. Political hostility is normally based on having to pay for what was freely available, and on the risk of exclusion for those with little revenue available for the extra cost of driving into the city.Pursuit of efficency leads to suggestion of marginal social cost pricing but this is hard to explain to the public and application of this principle is fraught with pitfalls since some components of that cost get smaller as traffic grows (noise related costs for example). Pricing is still a good option but the objective has to be something easier to understand and to serve as a target for mobility managers. That “new” objective is quality of the mobility system, with a meaning similar to that of “level of service” in traffic engineering, and prices should be managed to across space, time and transport modes in such a way that provision of service is made with good quality in all components.Pursuit of equity leads to some form of rationing, which has often been associated with high transaction costs and abuse by the administrators. But the use of electronic road pricing should allow easy ways to address the rationing process without such high costs. The basic proposition is that all local taxpayers receive as a direct restitution of their tax contribution a certain amount of “mobility rights”, which can be used both for private car driving in the tolled areas and for riding public transport.These principles are easily applicable with a variety of technical solutions for road pricing, from the simplest cordon pricing to the more sophisticated “pay-as-you-go” schemes. The paper addresses this question of implementation and argues for increasingly sophisticated schemes, as people get accustomed to the principles and finer targeting of demand segments may be needed.     

A vehicle quota integrated with road usage pricing: A mechanism to complete the phase-out of high fixed vehicle taxes in Singapore

This expository paper suggests a way to integrate a vehicle quota with usage based charging, including road pricing. It thereby challenges assumptions that ownership control requires high fixed vehicle costs. It focuses on Singapore, which famously has high purchase taxes and a Vehicle Quota System. These are effective but as a result of arguments against high fixed vehicle taxes, Singapore's authorities are gradually relaxing ownership control and increasing reliance on usage charges. This paper proposes a mechanism to ‘variabilise’ fixed taxes, including the vehicle permit price, in a way that is compatible with the vehicle quota. In particular, it proposes to integrate the vehicle quota with a new generation of electronic road pricing. This could make Singapore's shift to usage-based charging more efficient, complete and flexible while retaining the option to control vehicle numbers precisely.     

The politico-economic link between public transport and road pricing: An ex-ante study of the Stockholm road-pricing trial

A full-scale road pricing trial will be performed in Stockholm for 7 months in 2006. The road tolls are bundled with major improvements of public transport. The trial will be followed by a local referendum. We conduct numerical simulations with a model of modal choice to estimate the welfare effects of road tolls on commuters crossing the toll zone. We find that in the absence of revenue recycling, few commuters gain from the road-toll reform. However, the fraction of gainers rises considerably when public transport is improved as planned in Stockholm.     

Decomposing the decoupling of Danish road freight traffic growth and economic growth

In recent years many European countries have seen a decoupling of the growth in road freight traffic (vehicle kilometres) from economic growth. A similar decoupling has not been observed in road freight transport (tonne kilometres). In this paper the historical growth in national Danish road freight traffic and transport is attributed to causes using a Divisia index decomposition method. It is demonstrated that overall road freight traffic growth is a consequence of often opposite pointing growth effects in the underlying factors. The observed decoupling of road freight traffic growth from economic growth is mainly the result of use of larger vehicles, increasing average loads, and less empty running. Growth in road freight transport is primarily caused by growth in production. A decrease in the number of tons lifted per tonne produced (the handling factor) is offset by an increase in the tonne kilometres per tonne lifted.     

The sources of the Kuznets relationship between road fatalities and economic growth

This paper reports the results of an empirical analysis of the Kuznets curve relationship between per capita income and road fatalities across 60 countries over the period 1972-2004. This relationship hypothesizes that the number of road fatalities increases with increasing motorization in the early stages of economic growth. Eventually, due to advances in technical, policy and political institutions, it declines as per capita income increases. The quality of political institutions as well as improvements in medical care and technology are hypothesized to impact road fatalities. Results indicate evidence of a Kuznets curve relationship between per capita income and road fatalities for both highly developed and less developed countries and support our hypothesis that changes in institutional quality and medical improvements underlie the Kuznets relationship. The evidence presented in this study suggests that lowering corruption levels as well as improvements in medical care and technology would help to reduce road fatalities.     

Joint implementation of tradable credit and road pricing in public-private partnership networks considering mixed equilibrium behaviors

This paper investigates joint road charging schemes in a public-private partnership (PPP) network by simultaneously taking into account Cournot-Nash (CN) players and user equilibrium (UE) players. Each joint scheme comprises a tradable credit plan for public roads and a regular tolling plan for private roads. We show that, under UE-CN mixed equilibrium, there exist anonymous nonnegative joint schemes that can support a system optimum link flow pattern. By using preemptive approach, we further design three bi-objective optimization models with hybrid implementation of tradable credit and road pricing. Numerical examples demonstrate that the proposed methods are effective in managing PPP networks.     

Decentralizing Pareto-efficient network flow/speed patterns with hybrid schemes of speed limit and road pricing

This paper examines the potential of hybrid schemes of speed limit and road pricing for decentralizing Pareto-efficient flow/speed patterns that minimize total travel time and total emissions simultaneously. Both link flows and speeds are treated as independent variables in our bi-objective formulation. The resulting Pareto frontier is thus weakly dominant to that in previous literature. For any such favorable Pareto-efficient flow and speed pattern, we establish the existence of hybrid schemes of speed limits and non-negative/revenue-neutral tolls, whose set of user equilibrium (UE) solutions contains the Pareto-efficient one, and provide sufficient conditions under which the Pareto-efficient solution can be certainly obtained.