Abstract
This paper briefly considers the objectives of road congestion pricing and identifies prerequisites to the successful application of such a pricing scheme. The paper is divided into two sections. In the first section, a mathematical analysis of the constituents of an optimal road congestion price is offered. The eliminated inefficiency loss achieved by the introduction of a congestion levy is usually evaluated by means of an integral involving marginal trip cost, travel demand and average trip cost in two-dimensional (travel time, traffic flow)-space. In this section we show that this loss may, in fact, be evaluated more easily for a general marginal trip cost function and a linear demand function as the difference between the areas of a rectangle (representing the part of road agency revenue that lies below the original trip cost) and a triangle (representing the loss of consumer surplus of the reduced traffic) in (travel time, traffic flow)-space, eliminating the need to use integration. The next section deals with the application of the illustrated mathematical principles and proofs to a hypothetical case study relating to road congestion pricing in Cape Town.
Highlights
The argument in favour of road congestion pricing rests on the assertion that the same economic principles that apply to the allocation of other scarce resources should apply to road space as a commodity
In the section thereafter the mathematical principles and proofs are applied to a hypothetical case study relating to road congestion pricing in Cape Town
The optimal flow would correspond to the intersection of the demand curve d(q) and the marginal cost curve m(q) at E, and the object of charging a congestion levy would be to achieve the reduction of peak hour flow to that level
Summary
The argument in favour of road congestion pricing rests on the assertion that the same economic principles that apply to the allocation of other scarce resources should apply to road space as a commodity. The corollary for roads is that it is not sufficient that road users, as a class, on the average, should pay the costs of the road system as a whole; it is necessary that each user should meet the incremental cost resulting from his particular use. This principle is known as marginal cost pricing. WJ Pienaar & JH Nel a congested road. In the section thereafter the mathematical principles and proofs are applied to a hypothetical case study relating to road congestion pricing in Cape Town. This case study is intended to serve the purpose of an illustration; it is of limited scope and does not purport to represent the results of an extensive traffic engineering investigation
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