Comments on ‘The London congestion charge: a tentative economic appraisal’ ( )

Abstract

This paper responds to a recent study by Prud'homme and Bocajero which concluded that the benefits of London's congestion charging program are considerably exceeded by the costs of collecting the toll. The author of the current paper addresses the robustness of Prud'homme and Bocajero's results and the extent to which the conclusions are relevant to the future. The author demonstrates the high sensitivity of results to measured speeds before and after charging, highlighting the importance of speed measurement accuracy in any economic assessment of the gains from congestion charging. He argues that it is reasonable to apply significantly higher values of time for motorists using the charging zone than are normally used in the UK, and that adopting such values would show a positive benefit of the London scheme. Although the high cost of collecting revenues in London are indeed detracting from the net economic benefits, better technology could reduce these costs. These findings suggest that it would be wrong to postpone further implementation of congestion charging schemes based on Prud'homme and Bocajero's results.