Modeling Saliency in Transportation Pricing: Optimal Mixture of Automobile Management Policies

The authors introduce the advantage of behavioral economics into the transportation policy evaluation criteria that traditional economic approaches do not consider. To that end, the authors present a framework for using tax salience as a connection between the dimensions of government policy objectives (such as revenue, behavior change, and public acceptance) with tax instruments (such as car ownership charge, fuel tax, congestion tax, parking fee) meant to influence behavior. Salience is the psychological effect of paying more/less attention to something relative to its context. This paper concerns price saliency with respect to transportation, which the authors define as when actual cost differs from perceived cost depending on aspects of price and payment. A review of relevant literature on policy-making frameworks and tax salience reveals the connection between operational and externality costs, perceived costs to the user, and actual government collected revenue. Salience is proposed as a modifier for adjusting how much is paid by users of the transportation system (revenue), and how much users perceive paying (internalized externality cost), whereby users can internalize the cost of the negative externalities generated by car-related behaviors, and government can attain its objectives. The authors reveal the ambiguity of the equity principle: should a policy be equitable with respect to its actual tax, perceived tax, or effect on behavior? They discuss incorporating into the framework technology, privacy, policy synergies, and proxy instruments. Lastly, the complexities of salience’s relationship with acceptance and technology make it unclear whether decreasing salience is always desirable.

• Supplemental Notes:
  • This paper was sponsored by TRB committee ABE20 Transportation Economics.
• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Michel, Alyona
  • Zhao, Jinhua
• Conference:
  • Transportation Research Board 94th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2015-1-11 to 2015-1-15
• Date: 2015

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References;
• Pagination: 19p
• Monograph Title: TRB 94th Annual Meeting Compendium of Papers

Subject/Index Terms

• TRT Terms: Behavior; Costs; Economics; Policy making; Revenues; Taxation
• Subject Areas: Economics; Finance; Highways; Policy; Transportation (General); I10: Economics and Administration; I72: Traffic and Transport Planning;

Filing Info

• Accession Number: 01555606
• Record Type: Publication
• Report/Paper Numbers: 15-1133
• Files: TRIS, TRB, ATRI
• Created Date: Feb 27 2015 10:04AM