Curbing Gridlock Peak-Period Fees to Relieve Traffic Congestion -- Special Report 242 (1994) / Chapter Skim
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That is, it could be combined with changes to the structure of prices for parking and transit services and the provision of alternative modes. The committee's conclusions regarding implementing congestion pricing on U.S.
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Congestion pricing is technically feasible. Congestion fees could be collected on existing toll roads in much the same way that users currently pay tolls.
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For example, by applying congestion pricing on all thoroughfares in the greater Los Angeles area during peak travel periods, over S3 billion in congestion fees would be raised annually. To ensure that all income groups benefit, some of this money would have to be returned in some way to road users.
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A $0.06/km ($0.10/mi) congestion pricing fee charged during the peak period on all major routes in the San Francisco Bay Area is estimated to reduce total trips by 2.2 percent.
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Evaluation of early projects is crucial. If implemented, congestion pricing projects will remain controversial.
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should be given discretion regarding the use of revenues collected by congestion pricing pilot projects. ISTEA restricts the revenues earned from congestion pricing pilot projects to transportation purposes permitted under Title 23 of the U.S.
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Moreover, state or local officials may well require considerable latitude in the use ofthe funds raised from congestion pricing in order to make a proposal politically feasible. (The committee's suggestions for appropriate uses of the funds are discussed in the next section.)
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In the first round of solicitations for congestion pricing pilot projects, several proposals requested permission to price underused HOV lanes. This option would allow solo drivers to pay a fee to use available capacity on HOV lanes and continue to allow HOVs to travel free of charge.
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Matching project development grants should be made available to local governments, states, toll authorities, and metropolitan planning organizations funded out of the congestion pricing pilot program section of ISTEA. The federal government should give grants to local governments, states, or MPOs that would encourage these entities to examine the potential of congestion pricing, develop detailed proposals, and begin testing the practical and political feasibility of congestion pricing.
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The Clinton administration endorsed this proposal in its Climate Change Action Plan of October 1993. State and Local Governments The substantial revenues that congestion pricing can generate could be used to replace other taxes, compensate those who lose, or operate the transportation system more effectively.
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. This would offset criticism of congestion pricing, and the replacement of regressive taxes used to support transportation would help address equity concerns, particularly in areas where transportation is supported from sales taxes.
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. response to congestion pricing; · Studies of how the benefits and burdens of policies such as congestion pricing shift over time through labor, land, and retail markets; · Constituency building and the local politics of implementation; and · The efficacy of distributing tradable permits to all motorists for driving during peak periods as an alternative to charging congestion tolls (this option would allow motorists to be "bought off" of congested routes rather than being "tolled offal.
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Viewed from a helicopter hovering above the Bay Bridge in Oakland and as far as the eye can see, cars creep along 12 lanes of incoming traffic during the morning peak period. The traffic queues south of Washington, D
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When raised in the United States in the past, congestion pricing proposals were summarily dismissed. Despite its past lack of acceptance, congestion pricing is subject to renewed interest.
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Efficiency Economists have long advocated congestion pricing because it would use the existing transportation system more efficiently (Walters 1961; Vickrey 1959; Mohring 1965; Keeler and Small 1977; Hau 1992~. Most metropolitan areas would have sufficient highway capacity if the daily use of the system could be averaged over the hours of the waking day.
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By shifting some of the demand away from peak periods, the traffic would flow much more smoothly during peak periods and the facility would be more efficiently used in the off peak. As well as easing congestion on an existing facility, congestion pricing would also maximize the efficiency of use.
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Congestion pricing is proposed as the only demand management technique short of administrative rationing that can keep latent demand from congesting new facilities (or recongesting other facilities after some other measure has helped alleviate the peak demand)
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The prospect that employee trip reduction programs and other traffic restraints would be imposed in the San Francisco Bay Area led business leaders to urge consideration of congestion pricing as a more palatable alternative (Bay Area Economic Forum 1990~. Advances in Technology Congestion pricing was dismissed by some decision makers in the past partly because having motorists line up at toll booths to pay tolls would itself create congestion.
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Through strategies that could include tolls on roads or bridges, fees to enter congested areas, or changes in the structure of parking and transit pricing, congestion pricing would charge a premium to motorists who wish to drive on normally congested routes during peak travel periods. The subsidies to peak-period commuters have been characterized by the economist lohn Meyer as follows: Commuters going to work in major central business districts in the United States in their own motor vehicles directly pay for only about 25
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transportation control plans for those urban areas that failed to meet the ambient air quality standards ofthe CAA. Congestion pricing was one ofthe major policy instruments considered during this period.
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Concern that the poor would be less able than the middle class or the rich to pay congestion fees is often held up as an important political barrier to the acceptance of congestion pricing. (The unwillingness of some in the middle class to pay higher out-of-pocket expenses may be the more salient political barrier.)
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Before publication, the authors revised their papers on the basis of the discussion. Taken together, the papers provide a rich array of information about individual case studies from around the nation and thoughtful analyses by individual scholars about many of the critical issues surrounding congestion pricing.
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1964. Congestion Tolls- An Engineer's Viewpoint.
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In the subsequent section, various approaches are described that can be used to apply congestion pricing on road systems. The final section is a review of experience to date with congestion pricing worldwide.
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, but these increases mount up as additional drivers enter the traffic stream. If 400 motorists were added to this traffic stream, the first few additional motorists would
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Employers might shift their hours of operation, allow greater use of flex time by employees, or allow more telecommuting. In contrast, however, employers could also engage in efforts that would defeat the intent of congestion pricing, for example, by subsidizing the congestion fees paid by some employees (Deakin, Vol.
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Currently the only forms ot congestion pricing in operation are cordon pricing in Singapore and charges for distance traveled on the A-1 toll road outside Paris. Cordon pricing is also being applied in three Norwegian cities, but because the tolls do not vary by time of day (with a minor exception in Trondheim)
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increasingly feasible (see papers by Pietrzyk and by May in Volume 2~. EXPERIENCE Singapore A simple form of congestion pricing has been in place in Singapore since 1975 (Hau 1992~.
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the evening peak period was not subject to a congestion fee and remained quite congested until a fee was imposed in 1989.
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No other travel demand management policy tried in the United States short of wartime gasoline rationing has been shown to have such a significant and lasting effect on automobile use. Singapore, of course, is not a Western-style democracy, and the fact that areawide congestion pricing could be introduced in Singapore is not evidence that it could be introduced and implemented in the United States.
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suggested that the opposition involved more than just the congestion pricing proposal itself. This was the first time the British Governor had allowed the councils to vote on any issue; the explanation of the program and its benefits was clumsily conveyed to the public, and it occurred just at the time the British had agreed to return Hong Kong to China.
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. Congestion pricing is being actively considered in London and Cambridge, England.
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The intent is to shift some demand on the Bay Bridge to the off peak and to transit; this would reduce congestion and improve air quality. This proposal is the only congestion pricing pilot project that has been authorized under the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
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Route 57 \\ I i/ _ · _ Corridor Agency \\ ~ r men ~ : SAN DIEGO :~. COUNTY FIGURE 2-3 Route 91 and Route 57 projects are designed to use electronic congestion pricing.
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1986. Electronic Road Pricing in Hong Kong.
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Reviewed in the first section ofthis chapter are analyses of recent efforts to estimate the effects that congestion pricing might have on aggregate travel choices and how these changes would improve traffic flow in specific metropolitan areas. The second section provides estimates of the net economic benefits.
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Discussion about congestion pricing in the United States would not have advanced as far as it has without the emphasis on reducing pollution from mobile sources in the Clean Air Act 1990 Amendments (CAAA) and the growing interest in congestion pricing by environmental groups, business interests, and local and political leaders seeking market-based approaches to reducing congestion rather than regulations restricting travel.
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Mode: to or away from carpools, transit, or other mode. Destination: for nonwork trips, to shorter trips; for work trips, to changes in work or residential location.
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The most detailed and recent modeling of congestion pricing for specific U.S. metropolitan areas was applied to the San Francisco Bay Area and the South Coast Air Basin (the greater Los Angeles area)
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NET BENEFITS Congestion pricing on highways would have broad effects on the entire transportation system by shifting the demand for transportation services away from peak-period highway use by solo drivers. A reduction in the incentives to drive during peak periods would shift some traffic to the off peak, which would increase the efficiency with which the road system is used and reduce the demand for additional capacity.
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used to finance roads and transit. The revenues earned from congestion pricing could be used to ensure that all income groups benefit; this is important, because without the benefits that these revenues provide, the average commuter would be somewhat worse offthan before (Small 1983; Hau 1992~.
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2) suggests that Small underestimates the benefits of congestion pricing to existing transit users, many of whom have low incomes, by not estimating the benefits from improved transit operating speeds and service as a result of improved traffic flow.
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2~. (Chapter 4 contains discussions of how the revenues might be distributed to compensate groups adversely affected by congestion pricing and how the political feasibility of this concept could depend upon the vigor with which adversely affected individuals and groups might oppose it.)
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AIR QUALITY Concern about meeting state and federal air quality standards is a prime motivator behind the renewed interest in congestion pricing. Despite considerable reductions in several types of emissions over the last 20 years, many metropolitan areas are still unable to meet air quality standards for ozone and carbon monoxide.
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. Congestion pricing for the Bay Area and Los Angeles is estimated to reduce reactive organics by 5.5 to 8.2 percent and oxides of nitrogen by 2.9 to 8.4 percent.
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Assuming that in a regionwide congestion pricing program average speeds increase from less than 32 km/hr (20 mph) and do not increase to more than 64 km/hr (40 mph)
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These potential traffic shifts highlight the importance of designing congestion pricing pilot programs to avoid creating congestion at formerly uncongested points. ENERGY Regionwide congestion pricing would reduce energy consumption more directly than emissions.
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Neither theory nor research on the relationship between the cost of transportation and urban development provides compelling evidence to support whether congestion pricing would have a centralizing or decentralizing effect (Deakin, Vol.
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Commuting times that exist within the current distribution of jobs and residences in the Los Angeles metropolitan area are two-thirds longer than what would be required if workers were located in neighborhoods that minimized their commutes (Small and Song 1992~. Whether congestion pricing fees would induce substantial changes in residential location, however, would depend on the strength of other influences on residential location choice.
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From page 55... ...
Because congestion pricing would alter trip making and total travel, it would result in reduced air pollution from automobiles and would save energy. Regionwide congestion pricing in San Francisco and Los Angeles averaging $2.00 to $3.00/day, for example, could reduce emissions from automobiles by 3 to 9 percent, depending on the type of emission.
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By smoothing traffic flow, congestion pricing on individual facilities can substantially reduce risks to health. In applying congestion pricing to individual facilities, however, it is important to anticipate traffic diversion to alternate routes and to design pilot programs such that new areas of congestion are not created.
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In Papers Presented at the Congestion Pricing Symposium, June 10-12.
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In the second section of this chapter, polling data on the public's willingness to pay to avoid congestion are reviewed, how revenues could be used to ameliorate the distributional impact of alternative congestion pricing 58
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2~. Some toll roads in the United States and abroad are already offering electronic toll collection services.
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Privacy concerns were among the reasons that neighborhood councils in Hong Kong rejected congestion pricing in 1985 (Borins 1988~. As mentioned above, however, toll road patrons on routes with electronic toll collection can now set up cash accounts that protect their privacy, and some toll authorities will set up billing accounts in which the identity of the patron is not revealed to the authority.
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Individual jurisdictions may find it difficult to solve traffic congestion without coordination with neighboring jurisdictions, and even if they manage to reduce congestion on their streets, they may simply shift it to an adjacent community. In most metropolitan areas, there is no appropriate institution for managing a regional congestion pricing or parking management program.
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2~. Because metropolitan areas are not directly represented within state transportation departments, as they would be in a metropolitan district, there may be insufficient trust at the local level to grant a state agency the power to operate a metropolitan-wide congestion pricing system.
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Such a radical change in the organization of road authorities seems more than existing governmental agencies and the public could swallow in the short run, and having to create new utilities for something as controversial as congestion pricing may not help its feasibility. The regulated utility model may have some appeal over the longer term if congestion pricing gains acceptability with the public.
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Although no single institutional form appears perfect, there are sufficient existing models to suggest that satisfactory arrangements could be achieved. POLITICAL FEASIBILITY A shift from the current approach to highway finance and management to a congestion pricing approach would represent a significant even radical change.
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An analogy about public support for congestion pricing can be drawn from survey research in England. Whereas 57 percent of English respondents responded negatively to a question that asked whether they would favor congestion pricing in the abstract, this opposition was reversed when respondents were asked whether they would support congestion pricing if the funds were used to improve public transportation, reduce accidents, and improve pedestrian and cycling facilities.
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Fundamental to congestion pricing's political feasibility is whether those adversely affected, even if a relatively small minority, would be more motivated and able to garner political support than those who would gain from the policy. A review of the potential winners and losers helps illustrate the issues affecting political feasibility (Gomez-Ibanez 1992~.
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From page 67... ...
The equity of shifting to congestion pricing is complex because the net impact on the poor depends on the equity of the existing system of transportation finance and consumption and how it would be changed by congestion pricing. It can be argued that the existing system is not very equitable, particularly in regions where regressive sales and property taxes are important sources of financing transportation facilities (and where middle-income drivers are the main users of new facilities being supported with sales taxes)
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From page 68... ...
One approach would be to use the revenues to offset other regressive taxes dedicated to transportation. For example, the reduction in sales, gasoline, and property taxes could be designed to benefit lower-income groups proportionately more than they would higher-income groups, thereby offsetting the disproportionate impact of congestion pricing on the poor.2 If the disadvantaged groups include residents of a particular area, some part of the revenues could be dedicated to those residents in the form of tax rebates, commuter allowances, or improvements in roads, transit, bikeways, and sidewalks.
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Suburbanization of jobs and residences combined with the increase in suburb-to-suburb commuting trips have decreased the share of the total commute market for which existing bus and rail transit provide competitive services (Wachs 1989~. In most areas, congestion pricing could engender mode shifts to buses more than to trains.
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From page 70... ...
Although solo drivers making longdistance commute trips might represent a minority of commuters, they might well resist shifting mode and might be vocal in opposition. Facility Pricing As in the case of areawide pricing, congestion pricing on individual facilities should result in net benefits to commuters and an efficiency gain for the local economy.
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be ¢ · it E o ·c sit t4o4 Cal o Cal ._ o ._ Cal ._ to o as.= _ _ ·~ o _ C Q~ z 3 cd .
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The potential revenues from congestion pricing could be used to provide alternatives for those affected. Preliminary estimates of the revenue gain from a $1.00 toll increase for the Bay Bridge, for example, suggest increased annual revenues of about $8 million, or a 14 percent increase in total toll revenues.
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Whereas the seed money made available by the federal government might be appropriately restricted to purposes eligible under Title 23, the funds that are collected in the form of congestion tolls are local funds, and local governments ought to be able to apply them where they are deemed necessary. Indeed, more flexibility may be required in order to give local governments sufficient latitude to form coalitions that support congestion pricing.
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Summary It is possible to use the revenues earned from congestion pricing to compensate the losing groups such that each group benefits. The question of political feasibility depends in large part on how intensely individuals would experience the gains and losses.
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From page 75... ...
In California, for example, large employers supporting congestion pricing as an alternative to employee trip reduction programs, commercial developers supporting congestion pricing as an alternative to impact fees, and environmental groups supporting policies to reduce automobile dependence have formed an influential constellation of interests in support of congestion pricing (Giuliano 1992~. Transformational strategies would be more difficult in the case of facility or areawide congestion pricing because, despite the net benefits to society, not everyone wins.
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From page 76... ...
, those with low incomes who do not drive much during peak hours, state departments of transportation, local governments, and groups opposed to higher property and sales taxes. Whether these groups perceive that they could gain sufficiently from congestion pricing such that they would vigorously support it is a key question in determining political feasibility.
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Although there does not appear to be an ideal institutional mechanism for managing a regional congestion pricing program, workable institu
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~ tlon tees. Political leaders can pursue different strategies to enhance the feasibility of congestion pricing by minimizing opposition through program design, by maximizing support among interest groups that would support congestion pricing for reasons other than congestion relief, and by communicating essential ideas and values that congestion pricing proposals encompass.
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1992. An Assessment of the Political Acceptability of Congestion Pricing.
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1992. Using the Revenues from Congestion Pricing.
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From page 81... ...
A poorly designed initiative that fails, however, may spell the end of this approach to managing congestion or at least set it back by another 10 to 20 years. Offered in the first section are a tew design issues that need to be considered in any congestion pricing proposal.
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Proposal Development Congestion pricing has gained currency only in a few places, and even in these cases the process of gaining political acceptance has been quite slow and conditioned by almost unique circumstances. Interest in California has surely been fostered by the fiscal restrictions that voters have placed on state and local government spending, the continued rapid growth in population and automobile travel, and the stringent requirements of the California Clean Air Act.
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From page 83... ...
Because of the need to build consensus slowly and to fashion a politically feasible congestion fee, the first year of the San Francisco Bay Area congestion pricing pilot project will be devoted to extensive analyses of travel patterns and how they might be affected by toll increases (with particular emphasis on the impact on low-income individuals) , consideration of off-peak discounts for freight operations, estimates of the potential mode shifts to transit, focus group and survey research of potential public reaction to different price increases, and review of the proposal with various interests that could benefit from or block the proposal.
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From page 84... ...
Because this is a private project, however, there is less public information available about how the developers will estimate demand and how frequently the prices might be changed. During the first year of the San Francisco Bay Area congestion pricing pilot project, public and political opinion will be surveyed on the receptivity to different price increases for the Bay Bridge tolls.
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From page 85... ...
will be of great interest in this regard. A number of different variable pricing proposals have been made in an attempt to optimize the efficiency gains of congestion pricing.
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From page 86... ...
Motorists may also begin using neighborhood streets to avoid tolled routes, and fear of such effects by neighborhood groups could lead to rejection of proposals for congestion pricing. Any proposal for congestion pricing should make explicit the plans for handling traffic diversion and incorporate design features to minimize its impact.
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From page 87... ...
The privately financed and operated toll road in the median of the Riverside Freeway, which will have congestion tolls for single-vehicle occupants, offers just such an opportunity. The extensive evaluation ofthe Singapore congestion pricing program, conducted by staff at the World Bank with financial support from international organizations and from the Environmental Protection Agency, U
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From page 88... ...
It would be much more useful to draw a sample of carriers and business entities dependent on the transportation system and collect travel and cost data before and after congestion pricing was put in place. Effects on Facilities Another of the most important questions is whether and how much congestion pricing reduces congestion on specific facilities.
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From page 89... ...
The effects of congestion pricing on transit service would be of considerable interest. The improvement in traffic flows would provide faster and more timely bus service; this and the direct monetary incentive for people to shift from automobiles to transit should improve ridership and revenues (Kain, Vol.
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From page 90... ...
When individual facilities are tolled, for example, traffic diverted to other routes can increase the congestion and emissions on those routes. Whether congestion pricing results in net environmental benefits requires an empirical answer.
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OTHER RESEARCH Although many of the most important questions about congestion pricing the time savings and potential adverse impact on the poor can only be answered through evaluation of actual projects, there are issues and questions about congestion pricing that deserve further exploration independent of any project actually going forward. Commercial Transportation and Activities In examining the possible impact of congestion pricing on business activity and commercial transportation in the United States, the committee found no prior studies to inform its analysis.
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All of these elements are important to predicting how firms would be affected by congestion pricing. Research is also needed on how congestion pricing would affect commercial carriers operating in metropolitan areas.
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If congestion pricing strategies became widespread, they would diminish the need for building capacity to serve peak demand and would thereby reduce tax burdens and free more revenues for use in the private economy. Research is needed to estimate the magnitude of these effects and how the efficiency
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From page 94... ...
Evaluations are under way for London, Cambridge, and Edinburgh, and congestion pricing policies are being considered at the highest levels of government in the Netherlands and Sweden. International colloquia on congestion pricing and other demand management experience abroad would be helpful.
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From page 95... ...
Large employers in a region might be more attracted to congestion pricing than to employee trip reduction programs. Low-income advocacy groups might be attracted to the possible benefits that improved bus services would provide their constituency.
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From page 96... ...
1977. Road Congestion Pricing: the Singapore Experience.
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From page 97... ...
Congestion pricing, however, has long been the ugly duckling of travel demand management policies. Economists have promised for decades that a swan would emerge if governments would only try it.
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From page 98... ...
The technology being used in the Norwegian toll rings could be readily extended to congestion pricing. Electronic tolling costs far less than attended or automatic toll booths and allows for high traffic volumes since vehicles equipped with transponders
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From page 99... ...
If travel demand management programs such as employee trip reduction are necessary for meeting air quality goals, they would be more effective if combined with a congestion pricing strategy. Congestion pricing may not be popular initially with motorists, but it is more likely to be effective in improving mobility and meeting air quality goals.
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From page 100... ...
A combination of reasonably available demand management efforts such as improved transit services, lower transit fares, improved bicycle access, expansion of highoccupancy-vehicle lanes in the Bay Area, and other measures might approximate the effect that congestion pricing alone would have on trips and emissions, but would do so at a much higher cost. Shifts to Alternative Modes The estimates ofthe regional effects of congestion pricing are only approximations.
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From page 101... ...
Specific E:acilities In contrast to the areawide pricing scheme in Singapore, the toll rings in Norway, and the many studies of regional congestion pricing, the projects moving forward in the United States will apply congestion pricing to individual facilities. (These projects will have to be designed carefully to ensure that diverted traffic does not cause such congestion on alternate routes that the benefits would be lost.)
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From page 102... ...
The early congestion pricing projects are not likely to provide substantial new insight into their potential for relieving regional air pollution and saving energy, but they will provide unique opportunities to learn about motorist sensitivity to price changes, how different groups and individuals are affected, and the political sensitivity to pricing as a transportation policy option. The earliest congestion pricing project to be implemented will be a private toll road in Southern California; this is not an ISTEA congestion pricing pilot project and is not eligible for the extensive evaluation funding permitted for pilot projects.
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From page 103... ...
If individual projects succeed, they will help convince policy makers and the public of the benefits of congestion pricing. This process will take time, however; thus it may be many more years before congestion pricing would be applied throughout a metropolitan area in this country.
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From page 104... ...
2~. As described in more detail below, aggregate trend data on the average duration of the journey to work imply that speeds experienced by the average commuter have not worsened.
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From page 105... ...
cd >~-=O o ~ ~ o ~ ~ 5 ~ · ~ = ~ ' ~ ~ it ~ ' I._ cat <.n =x CONS (Jo · _ Cat (J Cat ~ .
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From page 106... ...
neither the TTI index nor the journey-to-work data measure congestion directly, (b) they are actually measuring different things (traffic volumes on specific facilities versus durations of work trips)
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From page 107... ...
A, ¢ · - o o A, ED To ~ ~ cry .e 'e .o ~ id ~ · ·~ ~ In ~ x o 1 ¢ ~ ~ Be m ~ ~¢, ~ ~ _ ~ 0 =° ~ ° ~ ~ ~ ~ I ~ ~3~ ~ ~ I ~ =3~ o .~ =~4 o o Cat a set .
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From page 108... ...
Rapid job growth in outlying areas of central cities quickly resulted in morejobs in the suburban rings than in the urban core and in much more dispersed locations. By 1980, commutes from suburb to urban areas-the popular notion of the typical journey-to-work trip-represented only 18 percent of commute trips for metropolitan areas with 500,000 or more population.
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From page 109... ...
Although this argument is quite plausible, it is not clear whether peak-period nonwork trips are actually occurring on the most congested facilities likely to be subjected to congestion pricing. For example, Giuliano (Vol.
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From page 110... ...
A much faster rate of growth has occurred in suburb-to-suburb trips than in suburb-to-central-area trips. Substantial growth has occurred in nonwork trips during the peak period.
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From page 111... ...
1993~.2 This index estimates congestion on the freeways and principal arterials within an urbanized area by comparing daily traffic per lanekilometer with a judgment regarding the traffic level at which congestion begins. The estimated congestion is weighted by total travel on each system such that a value of 1.0 indicates the beginning of congestion for an urban area.
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From page 112... ...
The TTI index is based on counts of daily traffic volumes rather than measures of peak-period traffic volumes because the daily traffic count on most major routes is an available statistic, whereas peak-period traffic volume is not. The selection of daily traffic levels at which congestion occurs is based on estimates of the average percentage of travel occurring in peak periods.
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From page 113... ...
The estimates of travel times used by Gordon and Richardson are based on surveys in which respondents are asked to estimate the duration of their work trips. As the authors acknowledge, one would expect that respondents would round off trip times in 5-min increments.
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From page 114... ...
In contrast to the relative stability in average commute times reported in census data, local surveys for both Los Angeles and the San Francisco Bay Area over a 20- to 30-year period indicate that reported average commutes are increasing. Between 1967 and 1991, average commutes in Los Angeles County increased by 21 percent, and between 1960 and 1990, average commutes in the San Francisco Bay Area increased 17 percent (SCAG 1993; Purvis 1994~.
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From page 115... ...
The time savings may offset the growing time losses of others using the increasingly congested facility. Thus it is possible to have both increased congestion on facilities and a stability in average commute times.
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From page 116... ...
1994. Changes in Regional Travel Characteristics and Travel Time Budgets in the San Francisco Bay Area: 1960-1990.
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From page 117... ...
In the short run the optimal toll would reduce congestion to its most efficient level. Congestion pricing theory holds that congestion tolls not only would optimize the use of the current road system and generate substantial net savings in the short run, but in the long run, and if other assumptions hold, they also would generatejust enough revenues to provide for demand in the future (Mohring and Harwitz 1962~.
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From page 118... ...
The basic theory of congestion pricing for roads has changed little since Knight's (1924) formulation.
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From page 119... ...
The shape of the speed-flow curve as demand approaches capacity provides a key clue to the theory of congestion pricing. This theory can be illustrated by examining how delay increases as the flow of vehicles per lane-hour increases.
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From page 120... ...
(or TVC/~ and the short-run marginal cost is equal to the change in total variable costs with each change in traffic flow [(TECH - TVC2~/(F~ -Fit. In the absence of a congestion toll, the quantity of traffic flow will be that which occurs at the point where the average cost curve intersects the
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From page 121... ...
Additional drivers joining a congested traffic stream, absent a congestion toll, may only be aware ofthe average cost they will experience and are largely unaware of the increased costs they are imposing on all other drivers. The theory of congestion pricing has been aptly described by Mohring and Anderson (1994~: Urban travelers both experience congestion and contribute to it.
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From page 122... ...
on an otherwise unused expressway, there would result the relationships between the instantaneous ratio of actual traffic volumes to "ideal" capacity (about 2,000 vehicles per lane-hour on an expressway) and the average (ACi)
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From page 123... ...
When highway capacity is allocated according to the average cost, the total loss to society due to these external costs is simply the sum of all delay costs in excess of the most efficient level. This loss is represented by the shaded area above the demand curve between the average and marginal cost curves (Figure B-3~.
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From page 124... ...
In addition to its short-run benefits, marginal cost congestion pricing 3Hau (1992b) discusses the full range of theoretical challenges to congestion pricing.
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From page 125... ...
In the latter case, if supply is not enhanced, a long-run income transfer will take place. Either of these two outcomes would violate the optimal resource goal of congestion pricing.
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From page 126... ...
A limitation on the improved fairness of congestion pricing is that motorists have different incomes and different abilities to pay (although it should be noted that the existing sources of highway finance, mostly gasoline and property taxes, along with sales taxes in some areas, are also regressive) .4 In economic welfare theory, the lack of equally distributed impacts is dealt with by making payments to those disadvantaged by a change in policy from the revenues generated by the policy change.
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From page 127... ...
and Hau (1992b) have shown that before the funds earned from congestion pricing are reinvested, the majority of highway users are made worse off by congestion tolls.
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From page 128... ...
As a result, the types of congestion pricing imposed in practice, though potentially more efficient than the current system of relying on average delay cost to ration demand, may not reach the optimal results predicted by theory (Gomez-Ibanez 1992~. EXPERIENCE Whereas the theory of congestion pricing sounds intriguing, many have doubted that congestion pacing would be practical.
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From page 129... ...
Amid area in the central city was marked off, and any motorist wishing to enter this area during the morning peak period had to display a windshield sticker, which cost approximately U.S.$1.65 per day initially. Stickers could be purchased from post offices and road-side booths.
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From page 130... ...
Singapore is currently planning to replace its windshield sticker system with an electronic pricing system (Richards 1992~. An initial evaluation of Singapore's congestion pricing experiment, financed by the World Bank, judged the proposal to have been successful because it met the goal of significantly reducing automobile congestion (Watson and Holland 1978~.
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From page 131... ...
, encouraged U.S. cities to participate in congestion pricing experiments as a means to reduce congestion.
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From page 132... ...
Despite the theoretical benefits of congestion pricing, concerns about fairness, motorist opposition to the concept, and fears of downtown merchants blocked implementation of these plans.
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From page 133... ...
A $1.00 areawide license was estimated to reduce trips to or through the central area by 44 percent. Recent estimates of congestion tolls were made for the Southern California Association of Governments (Urban Institute and KT Analytics 9 Many other studies have been conducted abroad to estimate the impact in specific Atones.
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From page 134... ...
my a, a, o ·e a, · i i o · 4" o it o am · m m ¢ .
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From page 135... ...
4= ~ - ~ cuts ~ c)
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From page 136... ...
Although Shoup and Wilson (1992a, 1992b) did not explicitly conduct a congestion pricing study, they estimated that employer-subsidized parking is roughly equivalent to about $3.00 per commuter per day, which is about what a $0.15/VMT congestion fee would equal if applied to an average round-trip commute of 20 mi.
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From page 137... ...
In Papers Presented at the Congestion Pricing Symposium, June 10-12, 1992, U.S. Department of Transportation, pp.
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From page 138... ...
In Papers Presented at the Congestion Pricing Symposium, June 1~12, 1992, U.S. Department of Transportation, pp.
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From page 139... ...
In Papers Presented at the Congestion Pricing Symposium, June 10-12, 1992.
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From page 140... ...
Dr. Wachs is active in the Transportation Research Board (TRB)
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From page 141... ...
Steve Heminger is Manager of Legislation and Public Affairs for the Metropolitan Transportation Commission, the metropolitan planning organization for the San Francisco Bay Area. When he joined the study committee, he was Vice President, Transportation, for the Bay Area Council, a regional business-sponsored public policy group.
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From page 142... ...
Mark A Pisano is the Executive Director of the Southern California Association of Governments.
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From page 143... ...
Dr. Small has authored books and articles on urban economics, transportation, public finance, and environmental economics, and has contributed to major national studies addressing highway financing policy and traffic congestion.
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From page 145... ...
The Board's program is carried out by more than 330 committees, task forces, and panels composed of more than 3,900 administrators, engineers, social scientists, attorneys, educators, and others concerned with transportation; they serve without compensation. The program is supported by state transportation and highway departments, the modal administrations of the U.S.
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Key Terms
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