A Small Cordon in the Hand is Worth Two in the Bush: Long-Term Consequences of Road Pricing

In recent years, congestion pricing has made an important leap from theory to practice. Short-term analysis of implemented road pricing policies demonstrates their benefits, and many studies compared pros and cons of various pricing schemes. At the same time, there are widespread concerns that road pricing might hurt downtown businesses and otherwise negatively affect economic development. Yet, long-term effects of road pricing remain largely unknown. In this paper, we evaluate and compare long-run economic effects of three cordon-based road pricing schemes applied to the Washington, DC metropolitan area. In order to conduct this analysis, we employ a spatially disaggregated general equilibrium model of a regional economy that incorporates decisions of residents, firms and developers, integrated with a spatially disaggregated strategic transportation planning model that features mode, time period, and route choice. We find that all cordon pricing schemes increase welfare of the residents as well as lead to GDP growth. At the optimum, the larger cordon and a double cordon lead to higher benefits than the small cordon encompassing downtown core. Nevertheless, the small cordon seems to be a safer bet: when the toll charge is set suboptimally, the net benefits from the small cordon compared to the optimum change negligibly, while the net benefits from the larger cordon decline sharply as the charge deviates from the optimal level.

• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Safirova, Elena
  • Houde, Sebastien
  • Coleman, Conrad
  • Harrington, Winston
  • Lipman, Abram
• Conference:
  • Transportation Research Board 86th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2007-1-21 to 2007-1-25
• Date: 2007

Language

• English

Media Info

• Media Type: CD-ROM
• Features: Figures; References; Tables;
• Monograph Title: TRB 86th Annual Meeting Compendium of Papers CD-ROM

Subject/Index Terms

• TRT Terms: Congestion management systems; Congestion pricing; Economic impacts; Land use models; Road pricing; Traffic congestion; Traffic restraint; Urban transportation policy; Welfare economics
• Geographic Terms: Washington (District of Columbia)
• Subject Areas: Economics; Highways; Society; I10: Economics and Administration;

Filing Info

• Accession Number: 01055821
• Record Type: Publication
• Report/Paper Numbers: 07-0693
• Files: BTRIS, TRIS, TRB
• Created Date: Aug 28 2007 10:56AM