8. Welfare and Distributional Effects of Road Pricing Schemes for Metropolitan Washington DC (original) (raw)

Just pricing: comparing the effects of congestion pricing and transportation sales taxes on low-income households

Transportation , 2008

Those who oppose congestion pricing on roads frequently argue that low-income, urban residents will suffer disproportionately if tolled to use congested freeways, either through higher out-of-pocket costs for travel and/or by diverting, delaying, or discontinuing trips. Too often, however, this assertion is made in the abstract, without considering 1) how much impoverished residents currently pay for transportation through fuel and sales taxes or 2) how much impoverished residents would pay for highway infrastructure under an alternative revenuegenerating schema, such as an increased sales tax. And while increased local sales taxes are among the faster growing forms of transportation revenues in the U.S., they are rarely criticized on social equity grounds. In this paper, we compare the cost burden of an existing congestionpriced high-occupancy/toll facility on State Route 91 (SR91) in Orange County, California, with the cost burden of Orange County's local option transportation sales tax. We use Consumer

Just Pricing: the Distributional Effects of Congestion Pricing and Sales Taxes

Transportation, 2008

Those who oppose tolls and other forms of road pricing argue that low-income, urban residents will suffer if they must pay to use congested freeways. This contention, however, fails to consider (1) how much low-income residents already pay for transportation in taxes and fees, or (2) how much residents would pay for highway infrastructure under an alternative revenue-generating scheme, such as a sales tax. This paper compares the cost burden of a value-priced road, State Route 91 (SR91) in Orange County, California with the cost burden under Orange County’s local option transportation sales tax, Measure M. We find that although the sales tax spreads the costs of transportation facilities across a large number of people inside and outside Orange County, it redistributes about 3million(USD)inrevenuesfromlessaffluentresidentstothosewithhigherincomes.TheentireMeasureMprogramredistributesanestimated3 million (USD) in revenues from less affluent residents to those with higher incomes. The entire Measure M program redistributes an estimated 3million(USD)inrevenuesfromlessaffluentresidentstothosewithhigherincomes.TheentireMeasureMprogramredistributesanestimated26 million from low-income residents to the more affluent. Low-income drivers as individuals save substantially if they do not have to pay tolls, but as a group low-income residents, on average, pay more out-of-pocket with sales taxes.

A framework for estimating the effects of congestion pricing : moving towards full-user-pay road pricing

2015

Road pricing has been touted by economists as a tool for financing infrastructure and curbing many of the problems associated with urban transportation such as congestion and pollution. This research establishes a framework for examining the effects of a Full-User-Pay (FUP-RPS), that is a system where road users pay the full cost incurred by driving that includes road maintenance as well as air, noise and water pollution. FUP road pricing scenarios were tested on Metro Vancouver in order to answer three questions: 1) How will an FUP-RPS affect different user groups by geography and transportation mode; 2) Which areas of a region can we expect to become more desirable or less desirable with a fully user pay road pricing system, and; 3) How will business and industry be affected in a FUP-RPS? Three FUP-RPS scenarios were tested, each one subsidizing transit differently. It was found that users of all modes in a FUP-RPS would benefit and that no transportation mode was favoured signifi...

Case Study Evaluation of a New Approach to Price Metropolitan Highways for Congestion Relief, Sustainability and Equity

Transportation Development Research, 2023

This paper addresses the practically important challenge of devising efficient and politically feasible congestion pricing policies in the context of metropolitan highways. Congestion on metropolitan highways continues to grow while governments struggle to fund alternative modes of travel. The purpose of this paper is to explore the viability of a new approach to address highway congestion while also accommodating the mobility needs of those who don't drive. It involves creating congestion-priced lanes on limited access highways without adding new lanes. The lanes would be taken from general use and reserved for high-occupancy vehicles (HOV), transit vehicles and toll-payers, with cash rewards paid to HOV and transit users to attract solo drivers to shared travel. Variable tolls charged to loweroccupancy vehicles on the dedicated lanes would limit traffic demand on the lanes, keep traffic flowing, and fund the cash rewards. Rewards would be high enough to attract a sufficient number of drivers to ride as passengers instead so that congestion would be eliminated on the toll lanes and reduced on the remaining toll-free lanes through mode shifts. The policy-level analysis using a real-world case study of a radial highway segment with directional peaking suggests that this congestion pricing/cash rewards strategy could generate surplus revenues and provide financial support for bus rapid transit operating on the congestion-free lanes.

Using Congestion-Priced Road User Charges to Restore Metropolitan Mobility and Fund Highways

Transportation Research Record: Journal of the Transportation Research Board, 2017

The purpose of this paper is to introduce and evaluate a congestion-pricing strategy that could be used in metropolitan areas to supplement revenue generation mechanisms such as mileage-based user fees and fuel taxes. Congestion charges would be applied with transponder-based technology only on limited access metropolitan highway facilities to pay for the costs of their reconstruction and maintenance. Since most of the worst congestion in metropolitan and state roadways occurs on limited access facilities, this strategy would address the goal of restoring mobility without raising the kinds of privacy concerns that appear with regard to other types of more comprehensive road user charging systems that use location-based technology, such as mileage-based user fees. Proceeds from congestion charges could be used to pay for new low-cost, part-time (dynamic) shoulder travel lane capacity and transit and carpooling enhancements. This approach can increase public acceptability by providing...

Congestion pricing, transit subsidies and dedicated bus lanes: Efficient and practical solutions to congestion

Transport Policy, 2011

We analyze urban congestion management policies through numerical analysis of a simple model that: allows users to choose between car, bus or an outside option (biking); consider congestion interactions between cars and buses; and allow for optimization of frequency, vehicle size, spacing between stops and percentage of capacity to be dedicated to bus lanes. We compare resulting service levels, social welfare and consumer surplus for a number of different policies and find that (i) dedicated bus lanes is a better stand-alone policy than transit subsidization or congestion pricing. The latter is marginally better than subsidization but has a negative impact in consumer surplus. (ii) efficient transit subsidies are quite large since in many cases first-best transit price is negative; establishing dedicated bus lanes or implementing congestion pricing render subsidies unnecessary for high demand levels. (iii) both subsidization and dedicated bus lanes would count with public support while congestion pricing would probably encounter strong opposition. (iv) transit subsidies and/or congestion pricing do not induce large changes on optimal bus size, frequency, circulation speeds and spacing between stops in mixed-traffic conditions: dedicated bus lanes do. (v) In all cases analyzed, revenues from congestion pricing are enough to cover transit subsidies; the optimal percentage of capacity that should be devoted for bus traffic is around one third.

Next Generations of Road Pricing: Social Welfare Enhancing

This paper offers a broad overview of road pricing from a social welfare perspective. I first examine two common objectives of road pricing: congestion management and profit making. My goal is to provide a guideline explaining how to promote a social-welfare-enhancing road pricing scheme. To this end, we should: (i) consider and improve public transportation systems by providing more environment-friendly transport options; (ii) include tolling profits in our welfare analysis (as opposed to what economists suggest) since residents are the real owners of roads not users, and since some users are from outside the region and so might not be excluded from analysis; and (iii) search for a holistic approach that takes into account system-wide impacts, disutility to users who change their travel behavior (i.e., switch to public transportation, shift their travel, or do not travel at all), and the impacts on land use, employment, and residents.

RESEARCH ARTICLE: Value of Time Clustering and the Efficiency of Destination-Based Congestion Pricing

Environmental Practice, 2011

In cities with a hub-and-spoke style transportation system, each individual's transit decision produces externalities contained within a particular transit spoke. When spokes vary in the typical number of drivers, in the capacity of the infrastructure, or in the average income of commuters, the efficient tax to charge drivers to minimize the externalities may vary across spokes. The size and importance of this variation are evaluated by comparing the potential welfare benefits of a congestion tax in Chicago, which is different rates for different highways to a tax that is a single rate. Using the 2000 United States Census Public Use Microdata to estimate wage distribution and data from the Illinois Department of Transportation on vehicle speed and road occupancy, this research provides estimates of optimal taxes for each neighborhood and for the city in aggregate. Results show that optimal tax rates vary substantially, from a low of 6.75pervehicleperdaytoahighof6.75 per vehicle per day to a high of 6.75pervehicleperdaytoahighof16.50, but that the overall welfare difference between charging a neighborhoodspecific tax and charging a citywide tax is minor. This occurs because the number of drivers changes very slowly at high tax rates, meaning that a wide range of taxes can produce nearly optimal results in terms of welfare. An optimal congestion tax of 11.25perdayisestimatedtoresultin400,000fewerdowntowncommutesperday,reducingpollutioncostsvaluedat11.25 per day is estimated to result in 400,000 fewer downtown commutes per day, reducing pollution costs valued at 11.25perdayisestimatedtoresultin400,000fewerdowntowncommutesperday,reducingpollutioncostsvaluedat2.9 million per year.