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On the potential remedies for license plate rationing

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  • Nie, Yu (Marco)

Abstract

This paper analyzes three travel demand management policies designed to correct the shortcomings of license plate rationing (LPR). The first policy couples LPR with a new vehicle quota scheme that directly controls auto ownership. The other two policies turn the driving permit into a tradable commodity. They differ, however, in that one policy ties the permit to the license plate while the other bestows all travelers with equal driving permits. All new policies may be viewed as “derivatives” of LPR because they share some key features: simplicity and revenue neutrality. Using a conceptual model that considers two modes (transit and driving) and user heterogeneity, we analyze user equilibrium solutions under each new policy, and for policies based on permit trading, introduce and characterize a function that links individuals' trading behavior to their value of time. Our analysis and numerical experiments show that giving tradable permits to all travelers is more efficient than the other alternatives. Under this policy, travelers who decide to own automobiles will acquire enough permits from those who do not so that the former can drive without any restriction. Consequently, the permit each traveler should receive can be easily determined from the ratio between a desired highway flow level and the total demand. Importantly, when the desired flow level equals the system optimal flow, the policy is revenue-neutral and first-best under idealized conditions.

Suggested Citation

  • Nie, Yu (Marco), 2017. "On the potential remedies for license plate rationing," Economics of Transportation, Elsevier, vol. 9(C), pages 37-50.
    • Handle: RePEc:eee:ecotra:v:9:y:2017:i:c:p:37-50
    DOI: 10.1016/j.ecotra.2017.01.001
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    4. Luo, Mingjie & Ma, Zhuanglin & Zhao, Wenjing & Enoch, Marcus & I-Jy Chien, Steven, 2022. "An ex-post evaluation of the public acceptance of a license plate-based restriction policy: A case study of Xi’an, China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 259-282.
    5. Yu, De-Ping & Li, Zhi-Chun, 2023. "Income distribution, implementation sequence, and equity in auto ownership rationing," Transportation Research Part B: Methodological, Elsevier, vol. 173(C), pages 59-89.
    6. Ling-Ling Xiao & Tian-Liang Liu & Hai-Jun Huang, 2021. "Tradable permit schemes for managing morning commute with carpool under parking space constraint," Transportation, Springer, vol. 48(4), pages 1563-1586, August.
    7. Zhi-Chun Li Author-Name : Wen-Jing Liu Author-Name : André de Palma, "undated". "Spatial heterogeneity in vehicle license plate lottery rationing," THEMA Working Papers 2024-11, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    8. Xi Lin & Yafeng Yin & Fang He, 2021. "Credit-Based Mobility Management Considering Travelers’ Budgeting Behaviors Under Uncertainty," Transportation Science, INFORMS, vol. 55(2), pages 297-314, March.
    9. Chen, Dongxu & Sun, Yu & Yang, Zhongzhen, 2020. "Optimization of the travel ban scheme of cars based on the spatial distribution of the last digit of license plates," Transport Policy, Elsevier, vol. 94(C), pages 43-53.
    10. Louis Balzer & Ludovic Leclercq, 2024. "Modal dynamic equilibrium under different demand management schemes," Transportation, Springer, vol. 51(2), pages 529-566, April.
    11. Chen, Rong & Gao, Ge & Kang, Liu-Jiang & Zhang, Li-Ye, 2024. "Efficiency and equity analysis on parking reservation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 187(C).

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