Estimating Urban Road Congestion Costs

Economists wishing to analyse road congestion and road pricing have usually relied on link-based speed-flow relationships. These may provide a poor description of urban congestion, which mainly arises from delays at intersections. Using the simulation model SATURN, we investigate the second-best proportional traffic reduction and find that linear speed-flow relations describe network flows quite well in eight English towns, though the predicted congestion costs and charges overstate those apparently required in our second best model. We then confront the results with feasible optimal cordon charges, and find them reasonably correlated, but imperfect predictors.

Dynamic traffic assignment approximating the kinematic wave model: system optimum, marginal costs, externalities and tolls

System marginal costs, externalities and optimal congestion tolls for traffic networks are generally derived from system optimizing (SO) traffic assignment models and when these are treated as varying over time they are all referred to as dynamic. In dynamic SO network models the link flows and travel times or costs are generally modelled using so-called ‘whole link’ models. Here we instead develop an SO model that more closely reflects traffic flow theory and derive the marginal costs and externalities from that. The most widely accepted traffic flow model appears to be the LWR (Lighthill, Whitham and Richards) model and a tractable discrete implementation or approximation to that is provided by the cell transmission model (CTM) or a finite difference approximation (FDA). These handles spillbacks, traffic controls and moving queues in a way that is consistent with the LWR model (hence with the kinematic wave model and fluid flow model). An SO formulation using the CTM is already available, assuming a single destination and a trapezoidal flow-density function. We extend the formulation to allow more general nonlinear flow density functions and derive and interpret system marginal costs and externalities. We show that if tolls computed from the DSO solution are imposed on users then the DSO solution would also satisfy the criteria for a dynamic user equilibrium (DUE). We introduce constraints on the link outflow proportions at merges and inflow proportions at diverges. We also extend the model to elastic demands and establish links with previous dynamic traffic assignment (DTA) models

Urban Congestion Charging: Theory, Practice and Environmental Consequences

The theory of road pricing developed for single links suggests time andlocation varying charges equal to the marginal congestion cost at the efficientlevel of traffic. The second-best network counterpart is derived, but would beinfeasible to implement. Cordon tolls are feasible, and their optimal levelcomputed for eight towns. A cost-benefit study showed that with a suitablechoice of location, all schemes were socially profitable, though with widevariations across towns. The environmental benefits of cordon tolls aremeasured and shown to correlate with optimal congestion tolls, but to bemodest in size and not to affect the optimal toll.road traffic congestion, road pricing, congestion charging, cordontolls, environmental taxes.

Traffic congestion and congestion pricing

For several decades growth of traffic volumes has outstripped investments in road infrastructure. The result has been a relentless increase in traffic congestion. This paper reviews the economic principles behind congestion pricing in static and dynamic settings, which derive from the benefits of charging travellers for the externalities they create. Special attention is paid to various complications that make simple textbook congestion pricing models of limited relevance, and dictate that congestion pricing schemes be studied from the perspective of the theory of the second best. These complications include pricing in networks, heterogeneity of users, stochastic congestion, interactions of the transport sector with the rest of the economy, and tolling on private roads. Also the implications of congestion pricing for optimal road capacity are considered, and finally some explanations for the longstanding social and political resistance to road pricing are offered. * The authors would..

Cordon pricing consistent with the physics of overcrowding

This paper describes the modeling of recurring congestion in a network. It is shown that the standard economic models of marginal cost cannot describe precisely traffic congestion in networks during time-dependent conditions. Following a macroscopic traffic approach, we describe the equilibrium solution for a congested network in the no-toll case. A dynamic model of cordon-based congestion pricing (such as for the morning commute) for networks is developed consistent with the physics of traffic.Ê The paper combines VickreyÕs theory with a macroscopic traffic model, which is readily observable with existing monitoring technologies. The paper also examines some policy implications of the cordon-based pricing to treat equity and reliability issues, i.e. in what mobility level a city should choose to operate. An application of the model in a downtown area shows that these schemes can improve mobility and relieve congestion in cities.Cordon Pricing, Congestion Pricing, Road Pricing, Value Pricing, Social Equity

Dynamic and Static congestion models: A review

We begin by providing an overview of the conventional static equilibrium approach. In such model both the flow of trips and congestion delay are assumed to be constant. A drawback of the static model is that the time interval during which travel occurs is not specified so that the model cannot describe changes in the duration of congestion that result from changes in demand or capacity. This limitation is overcome in the Vickrey/Arnott, de Palma Lindsey bottleneck model, which combines congestion in the form of queuing behind a bottleneck with users' trip-timing preferences and departure time decisions. We derive the user equilibrium and social optimum for the basic bottleneck model, and explain how the optimum can be decentralized using a time-varying toll. They then review some extensions of the basic model that encompass elastic demand, user heterogeneity, stochastic demand and capacity and small networks. We conclude by identifying some unresolved modelling issues that apply not only to the bottleneck model but to trip-timing preferences and congestion dynamics in general

Public and private roles in road infrastructure: an exploration of market failure, public instruments and government failure

Starting with a 'greenfield' situation, we discuss reasons for market failure in road infrastructure provision. We show why it may not be optimal from a welfare perspective to leave road provision fully to the market and government intervention in this sector can improve welfare. Government intervention comes in different forms, such as financial intervention (taxation, subsidies), regulation (price, quality, environmental), and public provision of roads or road services. The analysis of the literature regarding government instruments allows us to establish a correspondence between different forms of market failure and instruments. Several case studies of particular road infrastructure projects are included to illustrate the use of government instruments.

Traffic Congestion Pricing Methods and Technologies

This paper reviews the methods and technologies for congestion pricing of roads. Congestion tolls can be implemented at scales ranging from individual lanes on single links to national road networks. Tolls can be differentiated by time of day, road type and vehicle characteristics, and even set in real time according to current traffic conditions. Conventional toll booths have largely given way to electronic toll collection technologies. The main technology categories are roadside-only systems employing digital photography, tag and beacon systems that use short-range microwave technology, and in vehicle-only systems based on either satellite or cellular network communications. The best technology choice depends on the application. The rate at which congestion pricing is implemented, and its ultimate scope, will depend on what technology is used and on what other functions and services it can perform. Since congestion pricing calls for the greatest overall degree of toll differentiation, congestion pricing is likely to drive the technology choice.Road pricing; Congestion pricing; Electronic Toll Collection technology

Private operators and time-of-day tolling on a congested road network

Private-sector involvement in the construction and operation of roads is growing around the world and private toll roads are seen as a useful tool in the battle against congestion. Yet serious concerns remain about exercise of monopoly power if private operators can set tolls freely. A number of theoretical studies have investigated private toll-road pricing strategies, and compared them with first-best and second-best public tolls. But most of the analyses have employed simple road networks and/or used static models that do not capture the temporal dimension of congestion or describe the impacts of tolling schemes that vary by time of day. This paper takes a fresh look at private toll road pricing using METROPOLIS: a dynamic traffic simulator that treats endogenously choices of transport mode, departure time and route at the level of individual travellers. Simulations are performed for the peak-period morning commute on a stylized urban road network with jobs concentrated towards the centre of the city. Tolling scenarios are defined in terms of what is tolled (traffic lanes, whole links, or toll rings) and how tolls are varied over time. Three administration regimes are compared. The first two are the standard polar cases: social surplus maximization by a public-sector operator, and unconstrained profit maximization by a private-sector operator. The third regime entails varying tolls in steps to eliminate queuing on the tolled links. It is a form of third-best tolling that could be implemented either by a public operator or by the private sector under quality-of-service regulation. Amongst the results it is found that the no-queue tolling regime performs favourably compared to public step tolling, and invariably better than private tolling. Another provisional finding is that a private operator has less incentive than does a public operator to implement time-of-day congestion pricing.