This paper considers the second-best problem where not all links of a congested transportation network can be tolled. This paper builds on earlier work, in which the second-best tax rule for this problem was derived for general static networks, so that the solution presented is valid for any graph of the network, and for any set of tolling points available on that network. An algorithm is presented for finding second-best tolls, based on this general solution. A simulation model is used for studying its performance for various archetype pricing schemes: a toll-cordon, area licences, parking policies in the city centre, pricing of a single major highway, and pay-lanes and `free-lanes' on major highways. Furthermore, an exploratory analysis is given of a method for selecting the optimal location of toll points when not all links can be tolled.

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Second-best congestion pricing in general networks. heuristic algorithms for finding second-best optimal toll levels and toll points

The objective in this paper is to survey the literature in transportation economics, exploring two basic themes; first, the conceptual developments in the analysis of supply and demand, which recognizes noteworthy aggregation biases in the empirical work on aggregate data and indicate that a correct analysis of the issues should take place at a highly disaggregated level; second, the use of these conceptual developments to evaluate efficiency aspects of transportation pricing, investment, and the impact of government regulation on resource allocation and distribution in the transportation sector. It is important to acknowledge that the survey is based on research throughout the world but our institutional perspective and, to some extent, the topics that are covered is based largely on the U.S. experience. (Author)

Conceptual Developments in the Economics of Transportation: An Interpretive Survey

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.

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Traffic Congestion And Congestion Pricing

Pricing is considered an effective management policy to reduce traffic congestion in transportation networks. In this paper we combine a macroscopic model of traffic congestion in urban networks with an agent-based simulator to study congestion pricing schemes. The macroscopic model, which has been tested with real data in previous studies, represents an accurate and robust approach to model the dynamics of congestion. The agent-based simulator can reproduce the complexity of travel behavior in terms of travelers’ choices and heterogeneity. This integrated approach is superior to traditional pricing schemes. On one hand, traffic simulators (including car-following, lane-changing and route choice models) consider travel behavior, i.e. departure time choice, inelastic to the level of congestion. On the other hand, most congestion pricing models utilize supply models insensitive to demand fluctuations and non-stationary conditions. This is not consistent with the physics of traffic and the dynamics of congestion. Furthermore, works that integrate the above features in pricing models are assuming deterministic and homogeneous population characteristics. In this paper, we first demonstrate by case studies in Zurich urban road network, that the output of a agent-based simulator is consistent with the physics of traffic flow dynamics, as defined by a Macroscopic Fundamental Diagram (MFD). We then develop and apply a dynamic cordon-based congestion pricing scheme, in which tolls are controlled by an MFD. And we investigate the effectiveness of the proposed pricing scheme. Results show that by applying such a congestion pricing, (i) the savings of travel time at both aggregated and disaggregated level outweigh the costs of tolling, (ii) the congestion inside the cordon area is eased while no extra congestion is generated in the neighbor area outside the cordon, (iii) tolling has stronger impact on leisure-related activities than on work-related activities, as fewer agents who perform work-related activities changed their time plans. Future work can apply the same methodology to other network-based pricing schemes, such as area-based or distance-traveled-based pricing. Equity issues can be investigated more carefully, if provided with data such as income of agents. Value-of-time-dependent pricing schemes then can also be determined.

Maurice Marchand

Papers

A note on optimal tolls in an imperfect environment

A note on optimal tolls in an imperfect environment