Rethinking the Politics of Freeway Congestion Pricing

Abstract

A growing community of transport economists and urban planners has concluded that the best solution to U.S. freeway congestion would be to implement congestion pricing on all such freeways. At the same time, many political scientists and other political observers consider doing so to be politically impossible, primarily because of strong opposition from taxpayers, voters, and highway user groups. Federal efforts (dating to the 1970s) to induce one or more urban areas to price its freeways have been unsuccessful; this lack of success reinforces the political scientists' skepticism. This paper suggests that even if the political difficulties could be overcome, the conventional model of freeway congestion pricing (charging all users the same variable price) may not be optimal: this model could well create more losers than winners. In analyzing this conundrum, the author looks more closely at two assumptions implicit in the standard congestion pricing model: uniformly applied (variable) pricing and all general purpose lanes. Revisiting both assumptions leads to a proposal for multitier pricing on differentiated lanes, which the author suggests could be more politically feasible and productive of larger economic benefits. This approach also lends itself to being implemented in an evolutionary manner, in which each step is justified on its own merits, without regard of the possible longer-term end.