Road Pricing with Optimal Mass Transit

Marvin Kraus

No 771, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper asks the question, "How should the level of mass transit service be adjusted when road pricing is introduced for a substitute auto mode?" The reference point for the introduction of road pricing is second-best optimization in transit. Because this involves below- marginal-cost pricing in transit, it is efficient for road pricing to be accompanied by an increase in the transit fare and a reduction in service. This runs counter to the usual view of using the toll revenue generated by road pricing to provide a higher level of transit service.

Keywords: congestion pricing; road pricing (search for similar items in EconPapers)
JEL-codes: R4 (search for similar items in EconPapers)
Date: 2011-01-31, Revised 2012-04-15
New Economics Papers: this item is included in nep-reg and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Journal Article: Road pricing with optimal mass transit (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:771

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