Peak-Load Pricing of a Bottleneck with Traffic Jam

This paper generalizes the model of bottleneck congestion such that formation and development of traffic jams is explicitly formulated. The model is applied to the peak-load problem for the morning rush hour: every morning, a fixed number of commuters travel across a roadway, and each of them chooses departure time to minimize commuting cost consisting of travel time cost, scheduling cost, and toll. Equilibrium and optimal patterns of departure are solved and optimal peak-load toll is derived. Incorporating traffic jams alters the earlier results in the literature. That is, road users may be better off from paying the optimal peak-load toll. Conditions under which such a result is obtained are identified by simulations.     

Efficient Congestion Tolls in the Presence of Unpriced Congestion: A Peak and Off-Peak Simulation Model

This paper develops a congestion pricing model to examine efficient congestion tolls for an urban highway facility that resembles California State Route 91, the highway that has been subject to congestion tolls since December 27, 1995. Two lanes out of six (each way) are subject to congestion tolls, and the other four lanes are not. The simulation model combines the economic theories of second-best pricing of transportation facilities and peak-load pricing, and considers both welfare-maximizing and profit-maximizing cases. The simulation results show that the second-best peak period toll is quite low and that the welfare gains from the toll are modest compared to a regime in which all lanes are subject to tolls.     

Optimal road capacity in the presence of unpriced congestion

This paper studies how the optimal capacity of a road is affected by a pricing constraint which keeps the toll fixed below its optimal value. The answer is found to depend on the value of the price elasticity of travel demand at the second-best optimum. The pricing constraint lowers the optimal capacity, if the price elasticity is sufficiently high. But under reasonable assumptions, the pricing constraint raises the optimal capacity, if the price elasticity is less than the ratio of the consumer price of travel to the private congestion cost at the second-best optimum. This ratio cannot be less than one.     

On revenue recycling and the welfare effects of second-best congestion pricing in a monocentric city

This paper examines congestion taxes in a monocentric city with pre-existing labor taxation. When road toll revenue is used to finance labor tax cuts, 35% of the optimal road tax in our numerical model does not reflect marginal external congestion costs, but rather functions as a Ramsey–Mirrlees tax, i.e. an efficiency enhancing mechanism allowing for an indirect spatial differentiation of the labor tax. This adds a quite different motivation to road pricing, since welfare gains can be produced even in absence of congestion. We find that the optimal road tax is non-monotonic across space, reflecting the different impacts of labor supply elasticity and marginal utility of income, which both vary over space. The relative efficiencies of some archetype second-best pricing schemes (cordon toll, flat kilometer tax) are high (84% and 70% respectively). When road toll revenue is recycled lump-sum, the optimal toll lies below its Pigouvian level. Extensions in a bimodal framework show that the optimality of using road toll revenue to subsidize public transport depends on the initial inefficiency in public transport pricing.     

Optimal policies in cities with congestion and agglomeration externalities: Congestion tolls,labor subsidies,and place-based strategies

This paper develops a spatial general equilibrium model that accommodates both congestion and agglomeration externalities, while firms’ and households’ land-use decisions are endogenous across continuous space. Focusing on the interaction between externalities and land use patterns, we examine the efficiencies of first-best policies and second-best pricing and place-based strategies using numerical simulations. A first-best policy must combine both Pigouvian congestion tolling (PCT) and Pigouvian labor subsidies (PLS) instruments, or design an optimal toll (or subsidy) internalizing agglomeration externalities (or congestion externalities). We also examine second-best pricing policies if only one instrument is adopted. Congestion pricing policies alone (e.g., a partial PCT or a flat-rate toll) can improve social welfare only in heavy-congestion cities, and their welfare gains may be insignificant (e.g., below 10% of the welfare improvement achieved by first-best policies). In contrast, second-best labor subsidy policies alone are a more effective alternative to first-best policies. As to place-based policies, the firm cluster zoning (FCZ) regulation is more efficient than the urban growth boundary (UGB) policy. UGBs only have small effects on the agglomeration economy but could worsen land market distortions via residential rent-escalation effects. These findings suggest that it is important to internalize business land use decisions and relax monocentricity assumptions, in order to appreciate the interplay of both urban externalities, since spatial adaptations to policy interventions can distort system efficiencies.     

The incidence of congestion and congestion tolls

In contrast with the enormous literature on efficiency aspects of congestion tolls, very little has appeared on their equity implications. Simulation is applied to a standard urban model to learn about the distributional aspects of an optimal toll, or the absence of one. Tolls are found to produce distributional changes which may overshadow their effects on allocative efficiency. In passing, the model is used to demonstrate that lagged supply adjustments to increases in the demand for suburban housing may be an effective, if second-best, alternative to congestion tolls.     

An integrated model of downtown parking and traffic congestion

This paper is the first to look at cruising for parking from an economic perspective. We present a downtown parking model that integrates traffic congestion and saturated on-street parking; the stock of cars cruising for parking adds to traffic congestion. Two major results emerge from the model, one of which is robust. The robust one is that, whether or not the amount of on-street parking is optimal, it is efficient to raise the on-street parking fee to the point where cruising for parking is eliminated without parking becoming unsaturated. The other is that, if the parking fee is fixed at a sub-optimal level, it is second-best optimal to increase the amount of curbside allocated to parking until cruising for parking is eliminated without parking becoming unsaturated     

An integrated model of downtown parking and traffic congestion

This paper is the first to look at cruising for parking from an economic perspective. We present a downtown parking model that integrates traffic congestion and saturated on-street parking; the stock of cars cruising for parking adds to traffic congestion. Two major results emerge from the model, one of which is robust. The robust one is that, whether or not the amount of on-street parking is optimal, it is efficient to raise the on-street parking fee to the point where cruising for parking is eliminated without parking becoming unsaturated. The other is that, if the parking fee is fixed at a sub-optimal level, it is second-best optimal to increase the amount of curbside allocated to parking until cruising for parking is eliminated without parking becoming unsaturated     

A bathtub model of downtown traffic congestion

In standard economic models of traffic congestion, traffic flow does not fall under heavily congested conditions. But this is counter to experience, especially in the downtown areas of major cities during rush hour. This paper analyzes a bathtub model of downtown rush-hour traffic congestion that builds on ideas put forward by William Vickrey. Water flowing into the bathtub corresponds to cars entering the traffic stream, water flowing out of the bathtub to cars exiting from it, and the height of water in the bathtub to traffic density. Velocity is negatively related to density, and outflow is proportional to the product of density and velocity. Above a critical density, outflow falls as density increases (traffic jam situations). When demand is high relative to capacity, applying an optimal time-varying toll generates benefits that may be considerably larger than those obtained from standard models and that exceed the toll revenue collected.     

City size,network structure and traffic congestion

This paper presents an alternative approach for analyzing the relationship between land use and traffic congestion by employing the Macroscopic Fundamental Diagram (MFD). The MFD is an empirically observed relationship between traffic flow and traffic density at the level of an urban region, including hypercongestion, where flow decreases as density increases. This approach is consistent with the physics of traffic and allows the parsimonious modeling of intra-day traffic dynamics and their connection with city size, land use and network characteristics. The MFD can accurately measure the inefficiency of land and network resource allocation due to hypercongestion, in contrast with existing models of congestion. The findings reinforce the ‘compact city’ hypothesis, by favoring a larger mixed-use core area with greater zone width, block density and number of lanes, compared to the peripheral area. They also suggest a new set of policies, including the optimization of perimeter controls and the fraction of land for transport, which constitute robust second-best optimal strategies that can further reduce congestion externalities.     

Traffic externalities in cities: The economics of speed bumps,low emission zones and city bypasses

This paper considers various policy measures that governments can use to reduce traffic externalities in cities. Unlike much of the available literature that emphasized congestion, we focus on measures that reduce pollution, noise and some accident risks. These measures include noise barriers, speed bumps, traffic lights, tolls, emission standards, low emission zones, and bypass capacity to guide traffic around the city center. Using a simple model that distinguishes local and through traffic, we study the optimal use of these instruments by an urban government that cares for the welfare of its residents, and we compare the results with those preferred by a federal authority that also takes into account the welfare of road users from outside the city. Our results include the following. First, compared to the federal social optimum, we show that the city government will over-invest in externality-reducing infrastructure whenever this infrastructure increases the generalized cost of through traffic. We can therefore expect an excessive number of speed bumps and traffic lights, but the right investment in noise barriers. Second, when implementing low emission zones, the urban government will set both the fee for non-compliance and the emission standard at a more stringent level than the federal government. Moreover, at sufficiently high levels of through traffic the urban government will prefer imposing a toll instead of implementing a low emission zone. Third, whatever the tolling instruments in place, the city will always underinvest in bypass capacity. Finally, if it can toll all roads but is forced to invest all bypass toll revenue in the bypass, it will never invest in bypass capacity. Although the paper focuses on non-congestion externalities, most insights also hold in the presence of congestion.     

Hypercongestion in downtown metropolis

Engineering studies demonstrate that traffic in dense downtown areas obeys a stable functional relationship between average speed and density, including a region of ‘hypercongestion’, where flow decreases with density. This situation can be described as queuing behind a bottleneck whose capacity declines when the queue is large. We combine such a variable-capacity bottleneck with Vickrey scheduling preferences for the special case, where there are only two possible levels of capacity. Solving the model leads to several new insights, including that the marginal cost of adding a traveler is especially sensitive to the lowest level of capacity reached. We analyze an optimal toll, a coarse toll, and metering, showing substantial benefits from using these policies to eliminate the period of reduced capacity. Under hypercongestion, all of these policies can be designed so that travelers gain even without considering any toll revenues.     

A generalized congestion function for highway travel

Urban planners designing the optimal scale and pricing of highway services must pay close attention to the choice of the functional form used to describe the relationship between highway speed and the volume of roadway traffic. This congestion relationship is a crucial empirical fact for planning. While past work have posited a variety of speed-volume models, no successful efforts have been made to statistically compare the different specifications. This paper presents a generalized congestion function (GCF) which allows us to select the preferred (by a maximum likelihood criterion) speed-volume specification. The most prominent previous speed-volume models are all shown to be special cases of GCF. Failure to use the GCF approach may be very costly. For example, in the design of highway tolls the switch from the optimal GCF specification to a statistically “second-best” model may lead to a consumer surplus loss of $1 million annually for a typical urban area.     

Road congestion: A reconsideration of pricing theory

In this paper, the effect of congestion tolls upon the pattern of traffic flows is examined. Congestion tolls influence the individual commuter's decision of when to make a trip, inducing him to travel at less congested times. When all commuters are taken together, congestion tolls and the individual consumers' decisions lead to an efficient reorganization of traffic flows relative to a non-toll situation. In fact, for the same total number of commuters, per person costs of travel including the toll may decline with the imposition of tolls and efficient reorganization of traffic flows.     

Management bonus plans in a multiple-agent environment

This paper analyses optimal linear incentive contracts in a single-principal multiple-agent setting. It is proved that the second-best share ratios are function of the other agents' effort levels as well their degrees of risk aversion and the risk aversion of the principal. It is also shown that the total bonus pool to all agents in a difficult to monitor (decentralized) firm is greater than the total bonus pool in a easier to monitor (centralized) firm.     

Highway congestion and congestion tolls

Highway congestion is ubiquitous. We model the speed-flow relationship, identifying private and social costs, and the implied congestion toll for a number of proposed formulations. Using data for a limited access highway, we estimate these speed-flow relationships and find that flow as a quadratic function of speed fits best. The unit of observation is the individual vehicle and flow is measured in terms of the vehicles which passed a point shortly before or after the reference vehicle. Maximum possible flow occurs at 30–35 mph and the congestion toll is infinite for slower speeds. Rush-hour drivers have greater speeds for a given volume of traffic and thus congestion tolls must vary by time of day.     

Commuter arrivals and optimal service in mass transit: Does queuing behavior at transit stops matter?

This paper considers whether the optimal (second-best) mass-transit policy under a uniform-fare constraint is affected by passengers' queuing disciplines, by comparing the first-in-first-out (FIFO) and the random-access queuing. We analyze the problem by extending the model of mass-transit in Kraus and Yoshida (JUE(2002)) to the case of random-access queuing. The model involves the optimal number and capacity of trains as well as pricing. It is shown that, when the shadow value of a unit of waiting time exceeds that of a unit time of being late, the passengers' queuing discipline does not have any effect on the optimal (second-best) mass-transit policy including the number of trains and runs, scheduling, and pricing. If in turn, the shadow value of a unit of waiting time is smaller than that of being late, then aggregate travel costs are lower with random-access queuing than with FIFO, due to randomization of passengers' positions in a mass.     

Optimum,market and second-best land use patterns in a von Thünen city with congestion

This paper constructs a von Thünen type model with traffic congestion and two production inputs. A comparison between optimum and market land use patterns is presented. The second-best problem in which congestion tolls are not allowed is also considered. The policy variable in the analysis is the allocation of land between production and transportation. The result is examined in a cost-benefit analysis based on market rent.     

高速公路收费站无人值守自动发卡机的应用研究

近年来,我国高速公路网络发展迅速,给人们带来交通便利的同时,也产生了许多问题.如何提高高速公路各路段的综合管理水平,充分发挥路网中各高速公路之间快捷、畅通的通行优势,最大限度地减少人为干扰因素,成为摆在高速公路管理者面前的一项新的研究课题.文章从工程应用和收费管理工作的角度,对当前高速公路收费站应用无人值守自动发卡机的利弊和应用意义进行了分析.     

Voting on road congestion policy

This paper studies the political economy of urban traffic policy. A city council and a regional government (representing city and suburbs) decide respectively on parking fees and a road toll. Both charges are below the optimum when median voters in city and suburbs prefer cars to public transport sufficiently more than the average. Even if the city government would set an optimal road toll, the regional government blocks it when the median suburban voter prefers cars strongly enough. Letting the city control parking and road pricing may therefore increase chances of adoption of the latter. However, if the city controls parking and the region road pricing, the combined charges are higher than if the city controlled them both. Hence, when voters want all charges below the optimum, the involvement of two governments may be desirable. We also find that earmarking road pricing revenues for public transport is welfare-enhancing, compared to lump-sum redistribution, only if they are topped up by extra funds granted to the city by a higher level of government.