A model for optimizing electronic toll collection systems

Abstract

This paper examines the deployment of electronic toll collection (ETC) and develops a model to maximize social welfare associated with a toll plaza. A payment choice model estimates the share of traffic using ETC as a function of delay, price, and a fixed cost of acquiring the in-vehicle transponder. Delay in turn depends on the relative number of ETC and manual collection lanes. Price depends on the discount given to users of the ETC lanes. The fixed cost of acquiring the transponder (not simply a monetary cost, but also the effort involved in signing up for the program) is a key factor in the model. Once a traveler acquires the transponder, the cost of choosing ETC in the future declines significantly. Welfare depends on the market share of ETC, and includes delay and gasoline consumption, toll collection costs, and social costs such as air pollution. This work examines the best combination of ETC lanes and toll discount to maximize welfare. Too many ETC lanes cause excessive delay to non-equipped users. Too high a discount costs the highway agency revenue needed to operate the facility. The model is applied to California’s Carquinez Bridge, and recommendations are made concerning the number of dedicated ETC lanes and the appropriate ETC discount.