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Traffic Congestion and Congestion Pricing

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  • C. Robin Lindsey

    (University of Alberta)

  • Erik T. Verhoef

    (Vrije Universiteit Amsterdam)

Abstract

For several decades growth of traffic volumes has outstrippedinvestments inroad infrastructure. The result has been a relentless increase intrafficcongestion. This paper reviews the economic principles behindcongestionpricing in static and dynamic settings, which derive from thebenefits ofcharging travellers for the externalities they create. Specialattention ispaid to various complications that make simple textbook congestionpricingmodels of limited relevance, and dictate that congestion pricingschemes bestudied from the perspective of the theory of the second best. Thesecomplications include pricing in networks, heterogeneity of users,stochasticcongestion, interactions of the transport sector with the rest of theeconomy,and tolling on private roads. Also the implications of congestionpricing foroptimal road capacity are considered, and finally some explanationsfor thelongstanding social and political resistance to road pricing areoffered.

Suggested Citation

  • C. Robin Lindsey & Erik T. Verhoef, 2000. "Traffic Congestion and Congestion Pricing," Tinbergen Institute Discussion Papers 00-101/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20000101
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    Cited by:

    1. Börjesson, Maria & Brundell-Freij, Karin & Eliasson, Jonas, 2014. "Not invented here: Transferability of congestion charges effects," Transport Policy, Elsevier, vol. 36(C), pages 263-271.
    2. Julie Bulteau & Thierry Feuillet & Sophie Dantan & Souhir Abbes, 2023. "Encouraging carpooling for commuting in the Paris area (France): which incentives and for whom?," Transportation, Springer, vol. 50(1), pages 43-62, February.
    3. Li, Sen & Yang, Hai & Poolla, Kameshwar & Varaiya, Pravin, 2021. "Spatial pricing in ride-sourcing markets under a congestion charge," Transportation Research Part B: Methodological, Elsevier, vol. 152(C), pages 18-45.
    4. Farokhi, Farhad & Johansson, Karl H., 2015. "A piecewise-constant congestion taxing policy for repeated routing games," Transportation Research Part B: Methodological, Elsevier, vol. 78(C), pages 123-143.
    5. Pascal Courty & Mario Pagliero, 2011. "Does responsive pricing smooth demand shocks?," Applied Economics, Taylor & Francis Journals, vol. 43(30), pages 4707-4721.
    6. Levinson, David, 2005. "Micro-foundations of congestion and pricing: A game theory perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(7-9), pages 691-704.
    7. Gonzales, Eric J., 2016. "Demand responsive transit systems with time-dependent demand: User equilibrium, system optimum, and management strategyAuthor-Name: Amirgholy, Mahyar," Transportation Research Part B: Methodological, Elsevier, vol. 92(PB), pages 234-252.
    8. Patel Nilanchal & Mukherjee Alok Bhushan, 2015. "Assessment of network traffic congestion through Traffic Congestability Value (TCV): a new index," Bulletin of Geography. Socio-economic Series, Sciendo, vol. 30(30), pages 123-134, December.
    9. Nilanchal PATEL & Alok Bhushan MUKHERJEE, 2014. "Categorization Of Urban Traffic Congestion Based On The Fuzzification Of Congestion Index Value And Influencing Parameters," Theoretical and Empirical Researches in Urban Management, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 9(4), pages 36-51, November.
    10. Mohammed Ziaul Haider & Rabeya Sultana Papri, 2021. "Cost of traffic congestion in Dhaka Metropolitan City," Public Transport, Springer, vol. 13(2), pages 287-299, June.
    11. Gibson, Matthew & Carnovale, Maria, 2015. "The effects of road pricing on driver behavior and air pollution," Journal of Urban Economics, Elsevier, vol. 89(C), pages 62-73.
    12. Brendan Badia & Randall Berry & Ermin Wei, 2019. "Investment in EV charging spots for parking," Papers 1904.09967, arXiv.org.
    13. Masrono Yugihartiman & B. Budiono & Maman Setiawan & Achmad Kemal Hidayat, 2023. "Estimating Travel Choice Probability of Link-Based Congestion Charging Scheme for Car Commuter Trips in Jakarta," Sustainability, MDPI, vol. 15(10), pages 1-17, May.
    14. Beheshtian, Arash & Richard Geddes, R. & Rouhani, Omid M. & Kockelman, Kara M. & Ockenfels, Axel & Cramton, Peter & Do, Wooseok, 2020. "Bringing the efficiency of electricity market mechanisms to multimodal mobility across congested transportation systems," Transportation Research Part A: Policy and Practice, Elsevier, vol. 131(C), pages 58-69.
    15. Adnan, Muhammad & Nahmias Biran, Bat-hen & Baburajan, Vishnu & Basak, Kakali & Ben-Akiva, Moshe, 2020. "Examining impacts of time-based pricing strategies in public transportation: A study of Singapore," Transportation Research Part A: Policy and Practice, Elsevier, vol. 140(C), pages 127-141.
    16. Ronnie Schöb, 2005. "Not optimal, but Effective: the Multi-Mode Ticket for Reducing Urban Traffic Congestion in Medium-Sized Towns," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(3), pages 28-33, November.
    17. Odeck, James & Aasness, Marie Aarestrup, 2024. "What are the determinants of road users' experiences with congestion: Econometric assessment using ordered response models," Research in Transportation Economics, Elsevier, vol. 104(C).
    18. repec:ces:ifodic:v:3:y:2005:i:3:p:14567614 is not listed on IDEAS
    19. Ronnie Schöb, 2005. "Not optimal, but Effective: the Multi-Mode Ticket for Reducing Urban Traffic Congestion in Medium-Sized Towns," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(03), pages 28-33, November.

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