Is congestion pricing fair? Consumer and citizen perspectives on equity effects

Abstract

This paper discusses and analyses whether congestion charges can be considered to be “fair” in different senses of the word. Two different perspectives are distinguished: the consumer perspective and the citizen perspective. The consumer perspective is the traditional one in equity analyses, and includes changes in travel costs, travel times and so on. Using data from four European cities, I show that high-income groups pay more than low-income groups, but low-income groups pay a larger share of their income. I argue that which of these distributional measures is most appropriate depends on the purpose(s) of the charging system. The citizen perspective is about individuals’ views of social issues such as equity, procedural fairness and environmental issues. I argue that an individual can be viewed as a “winner” from a citizen perspective if a reform (such as congestion pricing) is aligned with her views of what is socially desirable. Using the same data set, I analyse to what extent different income groups “win” or “lose” from a citizen perspective – i.e., to what extent congestion pricing is aligned with the societal preferences of high- and low-income groups. It turns out that these differences are small, but overall, middle-income groups “win” the most in this sense.