Do changes in toll rates affect pedestrian, car, and truck traffic across the bridges between El Paso and Ciudad Juarez, Mexico? As more and more attention is paid to the use of tolls as funding mechanisms for new road and infrastructure construction in Texas, the answer to this question has policy implications not only for local and state lawmakers, but also for firms importing and exporting goods between Texas and Mexico. This article uses bridge traffic data from the Borderplex to examine the relative impact of tolls and concludes that local policymakers have more leeway than they thought in raising funds to make infrastructure improvements.Tolls; International Bridges; Border Economics

De Leon, Marycruz

Fullerton, Thomas M.

Kelley, Brian W.

Molina, Angel L.

English

Research Papers in Economics

  1 
Texas Business Review 
April 2009, Pages 1-5 
University of Texas at Austin • Bureau of Business Research • IC
2
 Institute  
 
Infrastructure Tolls in Texas: Evidence from the Borderplex 
 
Marcycruz De Leon 
Economic Research Department 
Greater Houston Partnership 
 
Thomas M. Fullerton, Jr. 
Department of Economics & Finance 
University of Texas at El Paso 
 
Brian W. Kelley 
Corporate Economics Department 
Hunt Communities 
 
Angel L. Molina, Jr. 
Department of Economics & Finance 
University of Texas at El Paso 
 
Background 
 
Transportation  infrastructure  in  the  United  States  is  primarily  built,  owned,  and 
maintained by government agencies.  Construction costs for new roads, plus maintenance and 
enhancements to existing road networks, create sizeable budgetary pressures that can exceed tax 
revenue capacity.  In response, transportation departments have periodically employed tolls as a 
means for financing new infrastructure and/or maintaining it once developed.  In many regions 
of the United States, tolls have provided funds that have helped alleviate grid deficiencies. 
 
 Tolls have also been utilized as a mechanism for controlling traffic volumes.  Bridge, 
road, and tunnel fees can help diminish network congestion by increasing transportation costs 
and  thereby  reducing  infrastructure  loads.    As  congestion  subsides,  vehicle  emissions  are 
reduced, thereby protecting air quality.  Improved technology employed in some areas of Texas 
allows electronic fee collection, eliminating the need for toll booths and allowing motorists to 
avoid wasting time in queues. 
 
Tolls are charged on several of the international bridges that link El Paso and Ciudad 
Juarez.  These user fess have quietly been in place for several decades and provide an important 
source  of  revenue  for  the  physical  infrastructure  connecting  these  border  metropolitan 
economies.  Pedestrians, passenger vehicles, and commercial vehicles are charged for using three 
of the four bridges between the sister cities.  Research recently completed at The University of 
Texas at El Paso examines the impacts of bridge fees, business cycles, and exchange rates on   2 
cross-border regional travel patterns using data on the international bridge tolls charged by the 
City of El Paso on southbound traffic into Mexico.  The studies also analyze the effects of 
currency values, regional economic conditions, and tolls charged on northbound traffic flows 
into the United States by the Caminos y Puentes Federales de Ingresos y Servicios Conexos 
(CAPUFE) agency of the federal government in Mexico. 
 
In fiscal year 2009, total fees across all user categories for using that infrastructure are 
expected  to  generate  approximately  $16.9  million  for  the  El  Paso  city  budget  (www.ci.el-
paso.tx.us).  Different types of users are associated with the various bridges.  For example, the 
Santa Fe Bridge near downtown El Paso is typically used by pedestrian tourists from the United 
States  who  want  to  visit  Mexico  without  driving.    The  nearby  Stanton  Bridge  is  traversed 
primarily by students, shoppers, and workers who reside in Ciudad Juarez and commute between 
the two border cities either by car or on foot. The Zaragoza International Bridge mostly carries 
two types of southbound traffic.  One is cargo vehicles headed to maquiladora plants in the 
eastern quadrants of Ciudad Juarez or farther south in the state capital of Chihuahua City.  The 
second is working professionals who commute to jobs on the opposite side of the border from 
where they reside.   
 
Data  utilized  for  this  analysis  are  from  three  of  the  international  bridges  in  the 
Borderplex: Santa Fe, Stanton, and Zaragoza.   Monthly data  gathered from the international 
bridges include the numbers of pedestrians, passenger vehicles, and commercial vehicles, plus 
the  respective  tolls  paid  by  each  group,  between  January  1991  and  December  2004.    Data 
utilized  as  explanatory  variables  include  Ciudad  Juarez  maquiladora  employment,  Mexico 
Industrial Production Index, El Paso non-agricultural employment, United States consumer price 
index (CPI), and a real exchange rate index for the peso.  Empirical analyses for the various 
traffic categories are  completed using applied econometric time series  procedures (De  Leon, 
fullerton, and Kelley, 2009). 
 
Empirical Outcomes 
 
The  first  traffic  flow  analyzed  is  cargo  vehicles  utilizing  the  Zaragoza  Bridge  in  the 
eastern part of the Borderplex.  An increase in the toll leads to a decrease in cargo traffic within 
one month of implementation.  Ciudad Juarez maquiladora employment, the Mexico industrial 
production index, and the real  exchange rate  are all positively correlated with cargo vehicle 
traffic on the Zaragoza Bridge.  A devaluation of the peso leads to a rapid increase in cargo 
vehicle traffic.  Importantly, the price elasticity calculated for this traffic category is -0.474, 
implying that cargo vehicle traffic on this bridge is not very sensitive to the tolls being charged.  
Comparative  simulation  exercises  conducted  for  this  traffic  category  are  inconclusive.    That 
means that accurate revenue forecasts and operations plans may difficult to achieve for cargo 
vehicle activity on this bridge. 
 
Modeling  results  for  Zaragoza  Bridge  passenger  vehicles  indicate  that  increases 
(decreases)  El  Paso  employment,  Ciudad  Juarez  maquiladora  employment,  and  the  Mexico 
industrial production index lead to increased (decreased) traffic volumes.  Inflation adjusted tolls 
and  the  real  exchange  rate  are  negatively  correlated  with  passenger  vehicle  traffic.    That  a 
weaker  peso  leads  to  a  decrease  in  passenger  vehicle  traffic  probably  reflects  the  loss  of   3 
purchasing power experienced by Mexican shoppers who visit large shopping centers such as 
Cielo Vista Mall and Las Palmas Marketplace in East El Paso.  The price elasticity of demand 
further indicates that passenger vehicle traffic on this bridge reacts very little to increases in the 
toll paid by cars.  Forecast tests conducted for this bridge traffic category confirm a high degree 
of predictability for it. 
 
  The Stanton Bridge is located near Downtown El Paso.  Passenger vehicle traffic flows 
across it are inversely related to changes in the real toll and exchange rate variables.   In the case 
of the peso index, that result potentially reflects the proximity of this bridge to the downtown 
retail  sector  on  the  north  side  of  the  border.    El  Paso  employment,  Ciudad  Juarez  in-bond 
assembly employment, and the Mexico industrial production index are positively correlated with 
volume  of  cars  that  travel  across  the  artery.    As  with  the  other  traffic  categories,  the  price 
elasticity indicates that the number of vehicles heading south across this structure is not very 
strongly affected by increases in the toll.  In contrast, simulation results for this variable are 
much less reliable than those for passenger vehicles in East El Paso.  That poses a challenge for 
revenue and operations planning for municipal authorities in charge of the bridge. 
 
Large numbers of shoppers who cross on foot from Mexico return home over the Stanton 
Bridge.  Not surprisingly, southbound pedestrian traffic flows on this bridge are inversely related 
to changes in the inflation adjusted values of the toll and the exchange rate.  El Paso non-
agricultural jobs, Ciudad Juarez maquiladora employment, and the Mexico industrial production 
index are all positively correlated with pedestrian traffic on the Stanton Bridge.  Reaction times 
for  this  traffic  category  to  changes  in  the  explanatory  variables  are,  similar  to  the  other 
categories, fairly quick.  However, as with southbound small vehicle flows across this structure, 
the forecasting exercises indicate that accurate predictions of foot traffic are hard to achieve. 
 
The  final  category  required  to  pay  southbound  tolls  on  the  international  bridges  is 
pedestrian traffic on the Santa Fe Bridge.  Pedestrian traffic is inversely related to changes in real 
toll  along  this  second  downtown  bridge.    For  all  other  explanatory  variables,  the  model 
coefficients carry positive signs.  For the real exchange rate, that result is very different than that 
observed for the Stanton Bridge.  It means that peso depreciation leads to an increase in foot 
traffic to the downtown Ciudad Juarez tourist district.  This bridge is the one that most tourists 
from the United States use when they walk across the border.  A stronger dollar probably attracts 
tourists who visit entertainment venues, restaurants, and shops, as well as medical tourists who 
are  customers  at  the  many  health  facilities  and  pharmacies  located  in  this  sector  of  Ciudad 
Juarez.  As with both categories of tolled traffic on the Stanton Bridge, the simulation exercises 
indicate that accurate forecasts of southbound pedestrian flows on the Santa Fe Bridge will also 
be difficult to achieve. 
 
  The passenger and cargo vehicle price elasticities estimated for the international bridges 
that charge tolls on southbound traffic in magnitude to many of those reported elsewhere in the 
transport economics literature.  One area in which some uncertainty remains is that comparative 
results for pedestrian reactions to changes in tolls have not been documented for other regions or 
borders.  Similarly, there have relatively few out-of-sample simulation analyses conducted to 
examine the forecast reliability of bridge traffic econometric models.  Results for the Borderplex 
tolled bridges indicate that accurate forecasts may only be achievable for structures where traffic   4 
volumes  are  increasing.    The  mixed  results  call  for  some  care  to  be  used  with  regard  to 
employing bridge traffic forecasts in public administrative exercises. 
 
Policy Implications 
 
  Several of the  results can potentially  be of use to policy  makers. Given that all five 
categories of bridge traffic are not very responsive to changes in the various tolls charged, rate 
increases will raise revenues without substantial reductions in volume usage.  Although it would 
be politically, and diplomatically, difficult to use international bridges connecting the United 
States  and  Mexico  as  “cash  cows,”  the  City  of  El  Paso  should  be  capable  of  covering  a 
substantial portion of current maintenance and future structural enhancement costs with the tolls 
charged.  At one point, there was a 9-year period from November 1994 to December 2003 during 
which passenger vehicle tolls were left unchanged in nominal terms.  There is no need to allow 
real erosion of the tolls to occur for such a long time.  All three user fees can be adjusted more 
frequently without damaging the respective revenue streams. 
 
Because the traffic flows are not very sensitive to toll increases, the tolls will not be of much use 
for congestion management.  Given the rapid growth of international commerce in this region, 
plus the strong rates of population and economic expansion in the Borderplex, congestion on the 
bridges will remain problematic and affect business viability.  That implies that more bridges, 
plus  ongoing  upgrades  and  enhancements  to  the  existing  structures,  will  be  imperative  if 
bottlenecks  to  growth  are  to  be  avoided.    Fortunately,  the  results  indicate  that  raising  tolls 
provides  one  means  for  financing  the  infrastructure  expansion  and  upgrades  that  will 
undoubtedly become necessary in future years.  Because the price reactions are inelastic, raising 
tolls at the bridges will not, however, be very effective as a tool for reducing vehicle emissions 
via reduced traffic volumes.  Greater bridge capacity that allows reducing border crossing times 
will be helpful in this regard. 
 
  All of the traffic categories respond within 60 days or less to toll rate changes.  Cargo 
traffic across the Zaragoza bridge reacts in less than 30 days to variations in in-bond assembly 
payrolls and industrial production activity in Mexico.  Staffing levels at that bridge will have 
very little time to be altered as Borderplex economic fortunes wax and wane with the North 
American  business  cycle.    Similarly  rapid  responses  also  occur  at  all  three  bridges  as 
consequences of variations in the currency value of the peso and non-agricultural employment in 
El  Paso.    Accordingly,  flexible  staffing  schedules  will  have  to  be  maintained  in  order  to 
maximize efficiencies and revenues at these international exit points from El Paso. 
 
  Given the mixed outcomes for the comparative out-of-sample simulation results, the LTF 
models  should  be  used  with  caution  in  municipal  revenue  forecasting  endeavors.    This  is 
especially  true  for  the  two  downtown  international  bridges  that  charges  tolls  on  southbound 
traffic to Ciudad Juarez.  At a minimum, traffic forecasts should be compared to recent historical 
observations  as  a  means  of  providing  “sanity  checks”  for  the  extrapolation  results.    During 
periods in which rate increases are enacted, policy analysts may elect to rely more heavily on the 
model  simulations  since  those  equations  provide  a  quantitatively  systematic  manner  for 
anticipating potential bridge usage impacts. 
   5 
  To date, the City of El Paso has only used fixed toll schedules.  That is probably because 
much of the congestion observed on the international bridges is for northbound traffic heading 
into El Paso.  That is principally due to more time consuming inspection practices historically 
applied  by  the  United  States  at  its  ports  of  entry.    It  is  possible,  however,  that  Borderplex 
economic and demographic expansion may also lead to more binding capacity constraints on the 
southbound lanes of the tolled bridges.  Under such a circumstance, variable congestion tolls 
might  offer  a  partial  mechanism  for  managing  the  greater  traffic  flow  volumes  and  raising 
additional revenues for infrastructure expansion.  The fixed schedules now in place, however, 
may  be  good  choices  for  a  regional  road  network  already  split  in  two  by  an  international 
boundary. 
 
  Tolls remain a highly controversial topic in El Paso and the State of Texas as a whole.  
State  government  funding  constraints  increase  the  likelihood  that  some  portion  of  the  road 
network in El Paso may one day be funded with tolls.  Econometric analysis of the long history 
of charging tolls on three of the international bridges indicates that local traffic behavior patterns 
are similar to those documented for other regional economies where such user fees are charged.  
Based on that, it seems logical that employing tolls to partially fund the street and highway grid 
in El Paso should meet with success. 
 
Whether these results for southbound international bridge traffic are unique to El Paso is 
unknown at this point.  Eventual comparative analyses for the other international bridges that 
charge tolls in Texas would be helpful.  Obvious candidates include Laredo – Nuevo Laredo, 
McAllen – Reynosa, and Brownsville – Matamoros.  Infrastructure financing constraints also 
pose obstacles to economic expansion in those metropolitan economies and empirical insight to 
the behavior of cross-border bridge traffic is likely of interest to business and policy analysts. 
 
Acknowledgements 
 
Partial financial support for this research was provided by National Science Foundation 
Grant  SES  0332001,  El  Paso  Electric  Company,  El  Paso  Metropolitan  Organization,  Hunt 
Building Corporation, Hunt Communities, Wells Fargo Bank of El Paso, JPMorgan Chase Bank 
of  El  Paso,  the  James  Foundation  Scholarship  Fund,  and  a  UTEP  College  of  Business 
Administration Faculty Research Grant.  Helpful comments and suggestions were provided by 
Tim Roth, Soheil Nazarian, and Martha Patricia Barraza de Anda. 
 
Bibliography 
 
M. De Leon, T.M. Fullerton, Jr., and B.W. Kelley, 2009, “Tolls, Exchange Rates, and 
Borderplex International Bridge Traffic,” International Journal of Transport Economics 36, 223-
259. 
 

Infrastructure Tolls in Texas: Evidence from the Borderplex

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