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Impact of congestion charging on the transit market: An inter-modal equilibrium model

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  • Wichiensin, Muanmas
  • Bell, Michael G.H.
  • Yang, Hai

Abstract

An inter-modal equilibrium model links an urban road network subject to a congestion charge to a parallel urban transit market, with a view to finding the optimum congestion charge consistent with the commercial decisions of the transit operator(s). A congestion charge is set to maximise social surplus. Travel behaviour is assumed to conform to elastic-demand user equilibrium traffic assignment. The transit market is assumed to be either a profit maximising monopoly or a profit maximising duopoly competing non-cooperatively. The operator(s) set the fares to maximise profits and the supply of transit services are determined by the resulting demand. The problem has been formulated as a bi-level programme with the determination of the congestion charge on the upper level and the setting of transit fares on the lower level. In the case of non-cooperating operators, the Bertrand-Nash equilibrium fares are sought. The results of the model are analysed for a small example based loosely on Edinburgh. This reveals the importance of competition in the transit market for the trade off between the government, the transit provider(s) and the travellers.

Suggested Citation

  • Wichiensin, Muanmas & Bell, Michael G.H. & Yang, Hai, 2007. "Impact of congestion charging on the transit market: An inter-modal equilibrium model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(7), pages 703-713, August.
    • Handle: RePEc:eee:transa:v:41:y:2007:i:7:p:703-713
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    1. José R. Correa & Nicolás Figueroa & Nicolás E. Stier-Moses, 2008. "Pricing with markups in industries with increasing marginal costs," Documentos de Trabajo 256, Centro de Economía Aplicada, Universidad de Chile.
    2. Preston, John, 2008. "Competition in transit markets," Research in Transportation Economics, Elsevier, vol. 23(1), pages 75-84, January.
    3. Kutzbach, Mark J., 2009. "Motorization in developing countries: Causes, consequences, and effectiveness of policy options," Journal of Urban Economics, Elsevier, vol. 65(2), pages 154-166, March.
    4. Patrick Maillé & Nicolás E. Stier-Moses, 2009. "Eliciting Coordination with Rebates," Transportation Science, INFORMS, vol. 43(4), pages 473-492, November.
    5. Feifei Qin & Xiaoning Zhang & Eoin Plant, 2017. "The welfare effects of nationalization in a mixed duopoly public transport market," Operational Research, Springer, vol. 17(2), pages 593-618, July.
    6. Tirachini, Alejandro & Hensher, David A. & Rose, John M., 2014. "Multimodal pricing and optimal design of urban public transport: The interplay between traffic congestion and bus crowding," Transportation Research Part B: Methodological, Elsevier, vol. 61(C), pages 33-54.
    7. Cantarella, Giulio Erberto & Cartenì, Armando & de Luca, Stefano, 2015. "Stochastic equilibrium assignment with variable demand: Theoretical and implementation issues," European Journal of Operational Research, Elsevier, vol. 241(2), pages 330-347.

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