Congestion Pricing Policy Research Articles

Urban Traffic Congestion Pricing Model with the Consideration of Carbon Emissions Cost

As one of the most effective traffic demand management opinions, congestion pricing can reduce private car travel demand and the associated carbon dioxide emissions. First, we summarized the status quo of transport carbon dioxide emission charges and congestion pricing, and then, we analyzed the characteristics of urban transport carbon dioxide emissions. Then, we proposed a (pricing) framework in which carbon emission costs would be considered as part of the generalized cost of travel. Based on this framework, this paper developed a bi-level mathematical model to optimize consumer surplus, using congestion and carbon emission charges as the control variables. A dissect search algorithm was used to solve the bi-level program model, and a numerical example was given to illustrate the methodology. This paper incorporates the emission pricing into the congestion pricing model, while considering two modes, and puts forward suitable proposals for the implementation of an urban traffic congestion pricing policy in China.

Traffic reallocation impacts and automobile toxic pollutants emission for a general network in urban highway system: a second-best congestion pricing analysis

This paper examines temporal, spatial and modal effects of second-best congestion pricing schemes in traffic volume reallocation, traffic mode shifting and automobiles toxic pollutants emission control in urban road systems. A problem in two time periods (peak and off-peak) and two travel modes (private car and bus) on one-way network is analysed, and a second-best congestion pricing model with multiple time periods and travel modes is constructed using an excess-demand approach. The paper provides a thorough empirical study of second-best scenario and two extreme regimes: no-toll problem and first-best problem. The main findings are: congestion pricing policies have major impacts: 1) diversion of tolled route to the free route; 2) shift of peak period traffic to the off-peak period; 3) shift of traffic volume by private car to bus; 4) reduction in total traffic volume and increase in total passenger volume (private car and bus); 5) reduction in the total emission amount of automobiles’ toxic pollutants.

Grey Correlation Analysis of the Impact of Rate on Urban Transport Structure

Taking the evaluation of the impact of access rates on urban transport structure as the study object, the impact of access rates on various modes of transportation was analyzed using the gray correlation which was a new evaluation method. The feasibility of adopting the traffic congestion pricing policy and the change of transport structure in Nanhai district of Foshan city were analyzed as a real case study. The results indicate that the implement of congestion pricing in Nanhai District of Foshan City, had little effect on the amount of car travel, but the improvement of the city's traffic structure is not obvious. Finally, some valuable suggestions on the optimization of traffic structure of Nanhai District of Foshan City were proposed.

Anticipating new-highway impacts: Opportunities for welfare analysis and credit-based congestion pricing

Pricing of roadways opens doors for infrastructure financing, and congestion pricing seeks to address inefficiencies in roadway operations. This paper emphasizes the revenue-generation opportunities and welfare impacts of flat-tolling schemes, standard congestion pricing, and credit-based congestion pricing policies. While most roadway investment decisions focus on travel time savings for existing trips, this work turns to logsum differences (which quantify changes in consumer surplus) for nested logit specifications across two traveler types, two destinations, three modes and three times of day, in order to arrive at welfare- and revenue-maximizing solutions. This behavioral specification is quite flexible, and facilitates benefit-cost calculations (as well as equity analysis), as demonstrated in this paper. The various cases examined suggest significant opportunities for financing new roadway investment while addressing congestion and equity issues, with net gains for both traveler types. Application results illustrate how, even after roadway construction and maintenance costs are covered, receipts may remain to distribute to eligible travelers so that typical travelers can be made better off than if a new, non-tolled road had been constructed. Moreover, tolling both routes (new and old) results in substantially shorter payback periods (5 versus 20 years) and higher welfare outcomes (in the case of welfare-maximizing tolls with credit distributions to all travelers). The tools and techniques highlighted here illustrate practical methods for identifying welfare-enhancing and cost-recovering investment opportunities, while recognizing multiple user classes and appropriate demand elasticity across times of day, destinations, modes and routes.

A framework for evaluating the dynamic impacts of a congestion pricing policy for a transportation socioeconomic system

This paper provides a modeling framework based on the system dynamics approach by which policy makers can understand the dynamic and complex nature of traffic congestion within a transportation socioeconomic system representation of a metropolitan area. This framework offers policy makers an assessment platform that focuses on the short- and long-term system behaviors arising from an area-wide congestion pricing policy along with other congestion mitigation policies. Since only a few cities in the world have implemented congestion pricing and several are about to do so, a framework that helps policy makers to understand the impacts of congestion pricing is currently quite relevant. Within this framework, improved bus and metro capacities contribute to the supply dynamics which in turn affect the travel demand of individuals and their choice of different transportation modes. Work travel and social networking activities are assumed to generate additional travel demand dynamics that are affected by travelers’ perception of the level of service of the different transportation modes, their perception of the congestion level, and the associated traveling costs. It is assumed that the, population, tourism and employment growth are exogenous factors that affect demand. Furthermore, this paper builds on a previously formulated approach where fuzzy logic concepts are used to represent linguistic variables assumed to describe consumer perceptions about transportation conditions.

Effects of Transportation and Land Use Policies on Air Quality

The effects of land use and transportation policies on emissions, ozone concentrations, and a metric for population exposure were investigated for Austin, Texas. Three distinct transportation and land use scenarios were examined with a gravity-based land use model and a standard travel demand model: a business-as-usual scenario, a road pricing policy that included a flat-rate carbon-based tax and congestion pricing of all Austin-area freeways, and an urban growth boundary policy. Two scenarios, a business-as-usual scenario and a flat-rate carbon-based tax and congestion pricing policy, were also examined with a novel, parcel-level land use change and land use intensity model and a standard travel demand model. Transportation and land use policies were predicted to have substantial effects on travel and on emissions of ozone precursors. Emissions of ozone precursors decreased markedly for all 2030 scenarios because of the implementation of more stringent federal motor vehicle emission control programs. Transportation and land use policies were predicted to lead to greater reductions of emissions of ozone precursors relative to the business-as-usual scenario. The effects of such policies on ozone concentrations and population exposure vary. Lower exposure was predicted for the road pricing scenarios, but a penalty appeared to exist in the form of relatively higher exposure predicted for the urban growth boundary on some days. This analysis indicates the potential complexity of planning for urban growth and equity and the need for integrated modeling and policy evaluation efforts.

Another Look at Airport Congestion Pricing

We study alternate approaches to implement congestion pricing at US airports. Conventional formulations toll all aircraft without determining whether a plane operated by a given airline delays other planes that it operates or planes operated by other airlines. Recent work points out optimal pricing calls for carriers to be charged only for the delay they impose on other airlines. We find a small difference between the net benefits generated by the two congestion-pricing policies because the bulk of airport delays are not internalized and because the efficiency loss from pricing internalized congestion is small. (JEL L11, L93, R41)

Credit-based congestion pricing: A Dallas-Fort Worth application

Under a credit-based congestion pricing policy, net revenues are distributed uniformly among qualifying travelers, to partially offset toll payments. This work predicts the traffic impacts, air-quality changes, welfare effects, and system implementation costs of such a policy, as applied to the Dallas-Fort Worth (DFW) region of Texas. Joint destination-mode choice models were estimated and applied. The status quo and two marginal cost pricing (MCP) scenarios were simulated for the short and long terms, with full feedback of trip costs and times. Monetarized logsum differences suggest that marginal cost pricing of congested freeways in this urban region, followed by travel credit distribution to all workers, is welfare improving for the great majority of such travelers. Moreover, high levels of recurring congestion ( V/ C ratios exceeding 1.5) are predicted to practically disappear.

Congestion Pricing in an Internet Market

This paper analyzes a unique dataset of art auctions on eBay. We study the behavior of buyers and sellers, demand and supply, by means of a novel structural estimation approach. Our empirical framework considers the process of arrival of new bidders as well as the distribution of bidder valuations of artworks being auctioned. We use this empirical framework to quantify the effect of market congestion, and congestion pricing strategies implemented by the market intermediary. Because we explicitly model the process of arrival of new bidders, we can estimate the effect of congestion pricing on the number of bidders, the distribution of bidders’ valuations, and the final selling price. Using the structural model we can also measure the impact of congestion pricing on the revenues of the artists and the market intermediary, as well as its effect on consumer surplus. Our results indicate that the congestion pricing policy acts as a coordination mechanism that facilitates the match between buyers and sellers.

Choosing Congestion Pricing Policy

Marginal cost pricing has been long advocated as an efficient way of distributing scarce road resources. In practice, however, policy makers have to retreat to second-best pricing schemes that are associated with lower transaction costs and are simpler for potential users to understand than the first-best marginal cost tolls. To date, the majority of practical applications and theoretical models in Europe and Asia are represented by cordon or area pricing mechanisms, while in North America, variations of link-based tolls have become dominant. This paper compares welfare effects of two second-best cordon pricing schemes with those of second-best link -based tolls for the Washington, D.C., transportation network. START, a strategic and regional transport planning model that features elastic travel demands as well as mode, time period, and route choice, is used to analyze the impacts of the two pricing approaches. Distributional effects of cordon and link-based tolls are also examined in the hope of understa...

Choosing Congestion Pricing Policy

Marginal cost pricing has been long advocated as an efficient way of distributing scarce road resources. In practice, however, policy makers have to retreat to second-best pricing schemes that are associated with lower transaction costs and are simpler for potential users to understand than the first-best marginal cost tolls. To date, the majority of practical applications and theoretical models in Europe and Asia are represented by cordon or area pricing mechanisms, while in North America, variations of link-based tolls have become dominant. This paper compares welfare effects of two second-best cordon pricing schemes with those of second-best link-based tolls for the Washington, D.C., transportation network. START, a strategic and regional transport planning model that features elastic travel demands as well as mode, time period, and route choice, is used to analyze the impacts of the two pricing approaches. Distributional effects of cordon and link-based tolls are also examined in the hope of understanding why one scheme might be preferred over another. Because Washington, D.C., in many respects resembles a European city, cordon policies are more likely to be effective there than in more typical North American cities. Although overall net welfare benefits achieved by the three schemes are found to be similar, their dependence on revenue recycling and distributional impacts are quite different. Although the small cordon puts a higher share of costs on low-income travelers than do other pricing schemes, in absolute terms these costs are lower. The exact distributional impact of a larger cordon is uncertain because it depends on the revenue recycling method employed.

A unified mixed logit framework for modeling revealed and stated preferences: formulation and application to congestion pricing analysis in the San Francisco Bay area

This paper formulates and applies a unified mixed-logit framework for joint analysis of revealed and stated preference data that accommodates a flexible competition pattern across alternatives, scale difference in the revealed and stated choice contexts, heterogeneity across individuals in the intrinsic preferences for alternatives, heterogeneity across individuals in the responsiveness to level-of-service factors, state-dependence of the stated choices on the revealed choice, and heterogeneity across individuals in the state-dependence effect. The estimation of the mixed logit formulation is achieved using simulation techniques that employ quasi-random Monte Carlo draws. The formulation is applied to examine the travel behavior responses of San Francisco Bay Bridge users to changes in travel conditions. The data for the study are drawn from surveys conducted as part of the 1996 San Francisco Bay Area Travel Study. The results of the mixed logit formulation are compared with those of more restrictive structures on the basis of parameter estimates, implied trade-offs among level-of-service attributes, heterogeneity and state-dependence effects, data fit, and substantive implications of congestion pricing policy simulations.

Determination of Zonal Congestion Toll On Urban Network by Genetic Algorithms

The congestion pricing policy has been recommended to reduce the traffic congestion on urban networks. The policy aims to maximize the social surplus in the transport market with toll charge. The link- based congestion pricing on the urban network should be assumed as the extension of the transport economic theory. However, the zonal congestion pricing can be more realistic with considering the unit price and technical feasibility. The pricing would be formulated as the combinational optimization problem to determine the levels of zonal toll. The realistic network problem is formulated to discuss the problem in the study. The optimal solution is obtained by search procedure of genetic algorithm. The applicability of congestion pricing policy can be mentioned in terms of traffic flow change and economic benefit.

Overcoming public aversion to congestion pricing

We have completed a survey of Southern California residents designed to examine whether the details of policy design can make congestion pricing more attractive to the motoring public. A congestion fee proposal is often regarded as simply a tax increase; also, especially in the US, motorists apparently regard the use of congestion fees as coercive, in that they often have few if any practical alternatives to paying the fee. Unlike most opinion surveys on congestion pricing, our survey was quite explicit about the fate of the collected revenues. For example, we presented respondents with policies that returned a substantial portion of the revenues to the public, either in the form of cash (through reductions in sales taxes and vehicle registration fees or through income tax credits) or in the form of coupons to be used for vehicle emissions equipment repair, transit, and the like. In addition, we examined whether the typically intense opposition to congestion pricing if applied only to a part of a roadway, leaving the motorist free to choose between free lanes and toll lanes. We find that a promise to offset the imposition of congestion fees by other taxes can result in a 7% point increase in support for congestion pricing policies, and the restriction of congestion pricing to a single lane on a freeway attracts from 9% to 17% points of additional support.

Model-based transportation policy analysis

The role of "models" has been well accepted in the analyses of problems dealing with transportation "operations" and "planning" decisions. The paper argues that even policy issues could use a model-based focused thinking in their analyses, even though in policy issues: (1) more entities are affected and have to be considered, (2) decision variables and constraints are not clearly defined, and (3) multiple objectives need to be satisfied. The paper introduces a recursive systems engineering process for policy analyses, with a significant role for models. Two case studies on policies to reduce traffic congestion are discussed. The first study relates to preferential treatment for high-occupancy vehicles for using the transportation facilities. The second study relates to altering travel demand by congestion pricing policies. Several types of models are utilised in these studies. The models provide insights, which otherwise might be difficult, on issues and sensitivities of potential decisions and assumed parameters.

External Costs Associated with Interregional Transport

The environmental and social costs of transport are becoming an important issue in Europe as car ownership and usage levels continue to rise. A subject of current debate is the internalization of these external costs by means of road-use pricing in a fair and efficient way, particularly in urban areas. Similar theory can be applied in an interregional transport context, but little research has been conducted in this area to date. The TRENEN model has been developed under the European Union TRANSPORT Program to quantify the marginal external costs of transport. Case studies have been completed for several European cities, using the urban version of the model, and for Belgium, Ireland, and Italy, using the interregional version. The calibration of the interregional model and the related case study results for Ireland are presented. The conclusions suggest users of all transportation modes currently pay less than the marginal external costs of their transportation activities. Another finding is that traffic congestion is a major externality. The model allows comparison of different transportation policy options with a full optimum scenario (the external costs are internalized precisely). Typically, such a policy would be difficult to implement, given the sophisticated pricing instrumentation required. However, it serves as a good baseline for testing other policies. In the case of Ireland, when a congestion pricing policy—similar to that used for motorways in France—was compared with the full optimum case, it achieved 60 percent of the maximum achievable welfare.

Congestion Pricing and Demand Management: A Discussion of the Issues

This article reviews the political, technological, and economic issues involved in the formulation of congestion pricing policy. Increased urban congestion combined with increasingly scarce resources is making policymakers consider congestion pricing as an alternative to expanding highway capacity. Past experiences with congestion pricing and other types of demand management are discussed in an attempt to identify problems policymakers may expect to encounter in the US.