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Tolling roads to improve reliability

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  • Hall, Jonathan D.
  • Savage, Ian

Abstract

A significant cost of traffic congestion is unreliable travel times. A major source of this unreliability is that when roads are congested, interactions between drivers can lead to capacity unexpectedly falling. For example, collisions can close lanes and aggressive lane changers can slow traffic. This paper analyzes how tolls should be set when accounting for such endogenous reliability. We find tolls should be higher and maximum flow lower than we might naïvely expect; and that such tolls make homogeneous drivers better off, even before the toll revenue is used. Simulations suggest the socially optimal maximum departure rate is 15% below that which maximizes expected throughput, and that tolling reduces private costs by almost 10%.

Suggested Citation

  • Hall, Jonathan D. & Savage, Ian, 2019. "Tolling roads to improve reliability," Journal of Urban Economics, Elsevier, vol. 113(C).
    • Handle: RePEc:eee:juecon:v:113:y:2019:i:c:s0094119019300646
    DOI: 10.1016/j.jue.2019.103187
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    References listed on IDEAS

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    Cited by:

    1. Chen, Jiandong & Yu, Jie & Shen, Zhiyang & Song, Malin & Zhou, Ziqi, 2023. "Debt financing and maintenance expenditure: Theory and evidence on government-operated toll roads in China," Economic Systems, Elsevier, vol. 47(1).
    2. Li, Zhi-Chun & Huang, Hai-Jun & Yang, Hai, 2020. "Fifty years of the bottleneck model: A bibliometric review and future research directions," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 311-342.
    3. Qiumin Liu & Vincent A.C. van den Berg & Erik T. Verhoef & Rui Jiang, 2024. "Pricing in the Stochastic Bottleneck Model with Price-Sensitive Demand," Tinbergen Institute Discussion Papers 24-011/VIII, Tinbergen Institute, revised 22 Oct 2024.
    4. Jonathan D. Hall, 2024. "Inframarginal Travelers And Transportation Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(3), pages 1519-1550, August.
    5. Durrmeyer, Isis & Martinez, Nicolas, 2022. "The Welfare Consequences of Urban Traffic Regulations," TSE Working Papers 22-1378, Toulouse School of Economics (TSE), revised Dec 2024.

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    More about this item

    Keywords

    Highway; Congestion; Tolls; Flow breakdown; Reliability; Uncertainty; Bottleneck;
    All these keywords.

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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