Bangkok’s locked-in traffic jam: Price congestion or regulate parking?

Abstract

The current state of inner city car transport is highly inefficient, producing congestion, air and noise pollution, accidents, and contributing to global warming. We evaluate the environmental and social costs of motorized transport in Bangkok that turned in the last 25 years from a bus and motorcycle to a car-traffic dominated city, one of the world’s most congested. We find that total external costs burden Bangkok’s economy by about 7% – 10.8% of the GRP, almost half originating in congestion. We evaluate optimal Pigouvian taxation of driving a vehicle in Bangkok and calculate the costs of on-street parking in the inner city. Optimal congestion charging is about $2.3, optimal road toll is about $2.7, and optimal inner city parking is about $3.2 per hour. Our results imply that urban mobility would profit most from a combination of congestion and parking pricing, maintaining most of the flexibility of transport, e.g., by incentivizing shared pooled mobility, while also improving urban quality of life. Better parking management and inner city tolls would benefit most cities in rapidly urbanizing and motorizing Southeast Asia.