Road Pricing Versus Tradable Entry Rights: A Transaction Cost Approach
This paper describes how, with respect to market-based transportation policies, it is a widely held view of transportation professionals that road pricing entails substantial, though far fewer, transaction costs than tradable transportation permit systems. This conclusion seems to hold only if operational costs are singled out and this paper explores all relevant market, managerial and political transaction costs associated with road pricing and tradable entry rights. The two instruments have the same objective, namely to reduce congestion, and, to a lesser degree, noise, safety and environmental externalities. It is argued that the prevalence of transaction costs is largely dependent on the design of the policy instrument and the technology used. Developments in new technology will ensure that transaction costs associated with implementing a network wide, fleet wide road pricing or tradable entry permit system can remain at a low level. Comparative analysis further shows that a cap-and-trade program of entry permits distributed for free (on a smart card), traded on a brokered market and monitored downstream is not only more effective, but also likely to entail fewer transaction costs than road pricing. Any attempt, in turn, to save the huge information and search costs incurred by road pricing impairs its efficacy by severing the link between the externality and the price paid.
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Availability:
- Find a library where document is available. Order URL: http://worldcat.org/isbn/1845641795
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Corporate Authors:
Ashurst Lodge
Ashurst, Southampton United Kingdom SO40 7AA -
Authors:
- Crals, E
- Vereeck, L
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Conference:
- Urban Transport XII. Urban Transport and the Environment in the 21st Century
- Location: Prague , Czech Republic
- Date: 2006-7-12 to 2006-7-14
- Publication Date: 2006-7
Language
- English
Media Info
- Media Type: Print
- Features: References; Tables;
- Pagination: pp 881-890
- Monograph Title: Urban Transport XII. Urban Transport and the Environment in the 21st Century
Subject/Index Terms
- TRT Terms: Externalities; Implementation; Market assessment; Markets; Noise; Policy making; Road pricing; Safety; Traffic congestion; Transportation planning
- Uncontrolled Terms: Congestion; tradable entry permits; Transportation professionals
- Subject Areas: Environment; Finance; Highways; Operations and Traffic Management; Planning and Forecasting; Policy; Research; Safety and Human Factors; I72: Traffic and Transport Planning; I80: Accident Studies;
Filing Info
- Accession Number: 01037541
- Record Type: Publication
- ISBN: 1845641795
- Files: TRIS
- Created Date: Nov 29 2006 9:15AM