Road Pricing for Congestion Management: The Transition from Theory to Policy

Abstract

Public officials have recently become more interested in congestion pricing and other schemes for charging for road use, such as toll roads or parking taxes. This broader group of policies is often called road pricing. The interest in road pricing has been stimulated by the desire to find new revenue sources for transportation investments, and by the failure of alternative policies to significantly stem the growth of traffic congestion. As a result, practical experience with road pricing has been increasing worldwide. For many years, the only example of congestion pricing was Singapore, a case that has received mixed reviews. This chapter summarizes 13 such cases, including Singapore, and draws lessons about implementation from them. In particular, the authors examine how well the theoretical advantages of congestion pricing hold up in the transition to practical and politically acceptable policies. The cases are divided into four broad categories: congestion pricing of a center city, center-city toll rings designed primarily to raise revenue, congestion pricing of a single facility, and comprehensive area-wide congestion pricing.