THE CALCULATION OF CONGESTION TAXES ON ROADS

WHEN DECIDING WHETHER TO MAKE A JOURNEY, A ROAD USER IS IN GENERAL CONCERNED ONLY WITH THE COSTS HE WILL BEAR AND THE VALUE TO HIM OF THAT JOURNEY. THE MARGINAL USER WILL BE THE USER TO WHOM THE MARGINAL PRIVATE COST IS EQUAL TO THE BENEFIT TO HIMSELF OF THE TRIP. THE USER IGNORES THE COSTS HE IMPOSES ON OTHER ROAD USERS BY HIS PRESENCE IN THE FLOW OF TRAFFIC. THESE COSTS MAY BE CALLED THE CONGESTION COSTS. THE MARGINAL SOCIAL COST OF A JOURNEY, DEFINED AS THE SUM OF THE MARGINAL PRIVATE COST AND THE CONGESTION COSTS. IS CLEARLY WELL ABOVE THE MARGINAL PRIVATE COST IN MANY URBAN AREAS. FOLLOWING THE AIM OF EQUATING MARGINAL SOCIAL COSTS AND MARGINAL PRIVATE COSTS BY CHARGING A CONGESTION TAX, IT WAS SHOWN THAT THERE WAS A CASE FOR A SUBSTANTIAL INCREASE IN THE PRESENT LEVEL OF TAXATION IN CONGESTED AREAS. THE DEMONSTRATION TOOK THE FORM OF AN APPRAISAL OF SUCH ATTEMPTS AS HAD BEEN MADE TO MEASURE CONGESTION TAXES, AND THE PRESENTATION OF ADDITIONAL TAXES BETWEEN DIFFERENT CLASSES OF VEHICLES WAS ALSO CONSIDERED. MEASUREMENT OF THE CONGESTION TAX WHICH WOULD EQUATE THE MARGINAL VALUATION OF A JOURNEY AND THE MARGINAL SOCIAL COST, I.E. THE MARGINAL PRIVATE COST PLUS TAX, WAS DISCUSSED AND ESTIMATES OF THE CONGESTION TAX FOR VARIOUS TYPES OF VEHICLES WERE GIVEN.

  • Supplemental Notes:
    • Vol 31, No 121, PP 72-81, 1 APP
  • Corporate Authors:

    London School of Economics

    Houghton Street, Aldwych
    London WC2A 2AE,   United Kingdom 
  • Authors:
    • Hewitt, J
  • Publication Date: 1964-2

Subject/Index Terms

Filing Info

  • Accession Number: 00201389
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jan 11 1971 12:00AM