poor, opposition by downtown businesses, and resistance to the concept of charging motorists directly for the use of roads has stymied the progress of such proposals.

In the first section of this appendix, the theory of congestion pricing is summarized. In the second section, the experience with congestion pricing abroad is reviewed, and in the third, estimates are provided of the possible effects of congestion pricing if applied in U.S. metropolitan areas.

The traditional approach to resolving congestion problems has been to expand capacity by adding new lanes or building new roads. This approach is problematic for both obvious and subtle reasons. Among the more obvious reasons, (a) in most urban areas addition of more lanes would be very costly because of the high cost of real estate, especially at a time when governmental agencies at all levels are short of funds, and (b) in some areas capacity cannot be enhanced because of concerns about air pollution or community opposition, or both. Among the more subtle reasons is the recognition that building new capacity induces new demand or shifts in existing demand that soon congest the new facility (Downs 1962).

Economists offer an alternative to building our way out of congestion that would instead change the behavior of some road users. They observe that whenever the price of using some scarce, valued good does not increase as demand increases, that good will be in short supply. Shortages will be acute if supply cannot be readily enhanced. This is typical of goods in industries with high capital or fixed costs. Throughout the economy, when demand for some commodity or service exceeds supply, the price tends to rise until demand and supply are in balance.

The basic theory of congestion pricing for roads has changed little since Knight's (1924) formulation.¹ Speed–traffic flow curves plotted by traffic engineers indicate that as the volume of traffic on a road approaches design capacity, speeds and traffic flow decline sharply ( Figure B-1). Once capacity has been reached, the addition of motorists into the traffic stream causes the flow of vehicles per lane per unit of time to decrease, resulting in the

Front Matter (R1-R10)

Executive Summary (1-15)

1 Introduction (16-26)

2 Theory and Experience (27-38)

3 Possible Effects (39-57)

4 Technical and Political Feasibility (58-80)

5 Design, Evaluation, and Research (81-96)

6 Summary (97-103)

Appendix A: Traffic Congestion (104-116)

Appendix B: Theory, Experience, and Estimated Effects (117-139)

Study Committee Biographical Information (140-146)