Document Type

Research Report

Publication Date

2010

Abstract

As discussed in detail in Roelofs and Springer (2007), “congestion pricing” involves charging users a variable price for the use of transportation facilities: increased congestion leads to a higher price, while the price of the facilities declines when overall usage decreases. In the broadest sense, the rationale behind such an approach is to best allocate the scarce resource of transportation capacity. Congestion pricing therefore treats transportation capacity as simply another type of “good” to be purchased by the individual. As with oranges or lumber, an increase in demand or a decrease in supply results in rising prices, while a decrease in demand or increase in supply yields lower prices. With many congestion pricing applications, the supply of transportation capacity is fixed, so prices change primarily in response to changing demand. For example, the toll on a roadway that utilized congestion pricing would be greatest during morning and evening rush hours and much lower at 2:00 AM.

Volume

11

Issue

October

Language

English

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