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Welfare and Distributional Effects of Road Pricing Schemes for Metropolitan Washington, DC

Ian Parry (), Winston Harrington, Per-Kristian Nelson (), Elena Safirova, Dave Mason and Kenneth Gillingham ()
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Per-Kristian Nelson: Resources for the Future

Discussion Papers from Resources For the Future

Abstract: Economists have long advocated congestion pricing as an efficient way of allocating scarce roadway capacity. However, with a few exceptions, congestion tolls are rarely used in practice and strongly opposed by the public and elected officials. Although high implementation costs and privacy issues are alleviated as appropriate technologies are developed, the concerns that congestion pricing will adversely affect low-income travelers remain. In this paper, we use a strategic transportation planning model calibrated for the Washington, DC, metropolitan area to compare the welfare and distributional effects of three pricing schemes: value pricing (HOT lanes), limited congestion pricing, and comprehensive congestion pricing. We find that social welfare gains from HOT lanes amount to three-quarters of those from the comprehensive road pricing. At the same time, a HOT lanes policy turns out to be much more equitable than other road pricing schemes, with all income groups strictly benefiting even before the toll revenue is recycled.

Keywords: traffic congestion; congestion pricing; value pricing; HOT lanes; HOV lanes (search for similar items in EconPapers)
JEL-codes: R40 R41 R48 H23 (search for similar items in EconPapers)
Date: 2003-10-01
New Economics Papers: this item is included in nep-pbe and nep-ure
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Related works:
Journal Article: 8. WELFARE AND DISTRIBUTIONAL EFFECTS OF ROAD PRICING SCHEMES FOR METROPOLITAN WASHINGTON DC (2004) Downloads
Working Paper: Welfare and Distributional Effects of Road Pricing Schemes for Metropolitan Washington, DC (2003) Downloads
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