Equity and distributional issues in transport pricing

The way in which different groups of people are affected, or perceive themselves to be affected, is an important determinant of the political acceptability of transport pricing reforms. This chapter summarizes the lessons from economic theory on how distributional considerations should be taken into account when determining transport pricing. Next, it summarizes the findings of applied studies on the vertical and spatial equity effects of transport pricing policies, either for actual road pricing cases, or from modelling studies. The analysis covers the distributional impacts of the change in the monetary costs, as well as the way in which people are affected by the change in the transport externalities (congestion, environmental impacts, accidents), and the benefits they obtain from the use of the revenues raised by the pricing reforms. Finally, the chapter discusses the way forward towards more objectivity in the distributional assessment of transport policy.