Can Tolling Help Everyone? Estimating the Aggregate and Distributional Consequences of Congestion Pricing

Jonathan Hall

Journal of the European Economic Association, 2021, vol. 19, issue 1, 441-474

Abstract: Economists have long advocated road pricing as an efficiency-enhancing solution to traffic congestion, yet it has rarely been implemented because it is thought to create losers as well as winners. In theory, a judiciously designed toll applied to a portion of the lanes of a highway can generate a Pareto improvement, even before using the toll revenue. This paper explores the practical relevance of this theoretical possibility by using survey and travel time data, combined with a structural model of traffic congestion, to estimate the joint distribution of agent preferences over three dimensions—value of time, schedule inflexibility, and desired arrival time—and evaluate the effects of adding optimal time-varying tolls. I find that adding tolls on half of the lanes of a highway yields a Pareto improvement. Further, the social welfare gains from doing so are substantial—up to $1,740 per road user per year.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://hdl.handle.net/10.1093/jeea/jvz082 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:jeurec:v:19:y:2021:i:1:p:441-474.

Access Statistics for this article

Journal of the European Economic Association is currently edited by Romain Wacziarg

More articles in Journal of the European Economic Association from European Economic Association
Bibliographic data for series maintained by Oxford University Press ().