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Congestion tolling - dollars versus tokens: A comparative analysis

André de Palma (), Stef Proost, Ravi Seshadri and Ben-Akiva, Moshe

Transportation Research Part B: Methodological, 2018, vol. 108, issue C, 261-280

Abstract: The case for some form of congestion tolling has long been made given the extent of traffic congestion in most urban transportation networks. However, there is little consensus on whether this tolling should be in the form of dollars (traditional congestion pricing schemes or price regulation) or in the form of tokens (credit based mobility schemes or quantity regulation). Although the comparison of price and quantity regulation has received significant attention in the economics community, the literature is relatively sparse in the context of transportation systems. The two systems differ not only in terms of transaction costs but also in their efficiency in dealing with demand and capacity shocks, frequent in road transport systems. This difference has been explored by economists in market contexts but the possible parallel in transport systems has largely been overlooked. This paper develops a methodology to compare the performance of price and quantity instruments under uncertainty using a simple transportation network consisting of parallel highway routes and a public transport alternative. Tolls (in dollars or tokens) are differentiated across roads and the permits or tokens can be traded across roads at fixed rates. The demand for each route is determined by a logit mixture model and the supply consists of static congestion. The comparison is based on the optimum social welfare which is computed for each instrument by solving a non-convex optimization problem involving stochastic user equilibrium constraints. Equity considerations are also examined.

Keywords: Tolls; Mobility permits; Uncertainty; Mixed logit; Social welfare; Equity; Stochastic demand; Static models; Pricing (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:transb:v:108:y:2018:i:c:p:261-280