Capturing value of reliability through road pricing in congested traffic under uncertainty

Empirical studies showed that travel time reliability, usually measured by travel time variance, is strongly correlated with travel time itself. Travel time is highly volatile when the demand approaches or exceeds the capacity. Travel time variability is associated with the level of congestion, and could represent additional costs for travelers who prefer punctual arrivals. Although many studies propose to use road pricing as a tool to capture the value of travel time (VOT) savings and to induce better road usage patterns, the role of the value of reliability (VOR) in designing road pricing schemes has rarely been studied. By using road pricing as a tool to spread out the peak demand, traffic management agencies could improve the utility of travelers who prefer punctual arrivals under traffic congestion and stochastic network conditions. Therefore, we could capture the value of travel time reliability using road pricing, which is rarely discussed in the literature. To quantify the value of travel time reliability (or reliability improvement), we need to integrate trip scheduling, endogenous traffic congestion, travel time uncertainty, and pricing strategies in one modeling framework. This paper developed such a model to capture the impact of pricing on various costs components that affect travel choices, and the role of travel time reliability in shaping departure patterns, queuing process, and the choice of optimal pricing. The model also shows the benefits of improving travel time reliability in various ways. Findings from this paper could help to expand the scope of road pricing, and to develop more comprehensive travel demand management schemes.     

Social welfare analysis of investment public–private partnership approaches for transportation projects

This paper has two objectives: (i) to introduce a new approach in order to gain widespread support for road pricing; and (ii) to develop a detailed social welfare analysis for road pricing schemes. We first describe our novel approach that stimulates public support for road pricing, which we refer to as an investment public–private partnership, or IP3. This approach returns a significant portion of the economic value created by road pricing back to the citizens who own the newly priced facility. We then present a social welfare framework that estimates the benefits and costs of using the IP3 approach on an urban transportation network. A P3 project’s impact on overall social welfare provides a more comprehensive evaluation criterion than the often-used Value for Money (VfM) analysis. Apart from several theoretical studies, a detailed social welfare analysis that includes all major P3 project stakeholders is absent from the literature. We use Fresno, California as our case study in order to conduct a welfare analysis on IP3s. Our results show that system-optimal tolling favors average users, but that government—and consequently taxpayers—should pay for costly tolling systems (negative profits). In contrast, unlimited profit-maximizing tolls raise substantial profits for government, for the infrastructure’s citizen-owners, and for the private sector, but the average user is worse off. From a social-welfare perspective, one should search for a Pareto improvement under which all major stakeholders are better off. Our estimates indicate that a mixed public and private tolling scheme offers such an improvement.     

The acceptability of road pricing in Vienna: the preference patterns of car drivers

The acceptability of road pricing has attracted considerable attention among researchers over the last decade, as is evident in the amount of literature about transport and environmental economics. The general conclusion from these studies has been that there is low acceptability for road pricing among car users. In this paper, we add more knowledge to the existing literature by conducting an acceptability study of road pricing in Vienna, where such a study has never been conducted before. We used a replication study approach where a previous approach used in the EU research project AFFORD (acceptability of fiscal and financial measures and organisational requirements for demand management) was replicated for Vienna and further supplemented with a conjoint analysis. In order to examining whether the Vienna study confirms previous findings. We investigated the acceptability of two concrete policy packages factors influencing this acceptability, and preference patterns that can be used in designing a road pricing policy for Vienna. The survey reveals a higher acceptability if road pricing schemes lead to perceived personal benefits. According to the multivariate analyses, the “personal outcome expectations”, “social norm” and “perceived effectiveness” variables account for more than 50 % of the criterion variance and therefore these are the most influential factors. Road pricing schemes can be an effective transport management instrument for a city particularly if they are associated with direct investment in public transport and public infrastructure. Thus, personal benefits can be perceived more easily and direct effects can be expected.     

Effect of advanced traveler information systems and road pricing in a network with non-recurrent congestion

The effect of the application of advanced transport information system (ATIS) and road pricing is studied in a transportation system under non-recurrent congestion. A stochastic network deterministic user equilibrium model (SNDUE) with elastic demand is formulated and used to evaluate the welfare and private impacts of different market penetrations of ATIS, together with road pricing for a simple network. Both marginal first-best road pricing and a second-best fixed road pricing are considered. The incentives of private users to use ATIS are analyzed and the characteristics of optimum tolls as a function of ATIS market penetration are shown. We conclude that ATIS is an efficient and necessary tool to reduce the effects of non-recurrent incidents in a transportation network, especially when non-recurrent congestion causes a significant deterioration of operational conditions of the network. If the impact of non-recurrent incidents on free flow costs is small or is reduced only to congestion effects, the use of road pricing would be more efficient. Social benefits obtained when jointly implementing ATIS and road pricing are practically the same whether first-best or second-best road pricing is used. Considering the private costs perceived by the network users, and the benefits experienced by equipped users, the maximum level of market penetration achieved could be limited because private benefits disappear after certain market penetration is obtained.     

Spatial impacts of road pricing: Accessibility, regional spillovers and territorial cohesion

Road pricing policies are gaining prominence in EU countries. These policies have positive impacts leading to mobility patterns which are socially and environmentally more desirable, but they also have negative impacts. One negative impact is to be found in regional accessibility, due to the increase in generalized transport costs. This study presents a methodology based on accessibility indicators and GIS to assess the accessibility impacts of a road pricing policy. The methodology was tested for the Spain’s road network considering two road pricing scenarios. It enables not only the more penalized regions to be identified but also negative road pricing spillover effects between regions. These effects are measured in terms of accessibility changes occurring in one region produced by charges implemented in another region. Finally, the study of accessibility disparities (by calculating inequality indexes for each of the scenarios considered), provides policymakers with useful information regarding the impact of road pricing policies from the point of view of territorial cohesion.     

Reactance or acceptance? Reactions towards the introduction of road pricing

We tested the opposite predictions of reactance and dissonance theory, two popular psychological theories, with regard to the responses of car drivers to the introduction of the road pricing. Reactance theory predicts that persons who are convinced that a toll will come are more opposed than less convinced persons. In contrast, dissonance theory expects that convinced persons are more in favour of road pricing than less convinced persons. Aim of the study was to test which theory is more appropriate to explain user reactions towards the toll introduction. We experimentally manipulated the perceived likelihood (low, middle, high and a control condition) of a toll introduction for private cars on German motorways (N = 140 car drivers). In accordance with the predictions of dissonance theory, results revealed clearly that convinced persons about a definite introduction of road pricing developed more positive attitudes towards road pricing than less convinced persons, i.e., the strength of conviction about the introduction of road pricing has a strong effect on the attitudinal evaluation of road pricing. The implications are discussed.     

Road pricing — should and might it happen?

This article discusses recent attempts to implement a federally sponsored road pricing demonstration in the United States. It examines reasons for the attempts, pointing to several enduring traffic related problems; the greater effectiveness and flexibility of road pricing compared to other measures; and the proven feasibility of area licenses as in Singapore. The generally negative reaction of city decision-makers to road pricing is specified, particularly concerns about harm to businesses, interference with the right to travel and discrimination against the poor. Some lessons for further attempts at implementation of road pricing include more attention to contingency planning for worst possible outcomes; the design of parking permit programs which might lead the way to road pricing; and the selection of recreational rather than downtown sites for first attempts at innovative parking permit and road pricing schemes.     

Welfare effects of road pricing and traffic information under alternative ownership regimes

This paper models strategic interactions between a road supplier, a provider of traffic information, and road users, with stochastic travel times. Using a game-theoretical analysis of suppliers’ pricing strategies, we assess the social welfare effects of traffic information under various ownership regimes. The results show that the distortive welfare effect of monopolistic information pricing appears relatively small. Collusion of the road operator and information provider yields higher social welfare than independent pricing by two firms. The intuition behind this result resembles that behind the welfare effects of double marginalization, but is not exactly the same, as traffic information is not strictly complementary to road use.     

Road pricing: An international perspective

This paper reviews experience with road pricing in Europe and Asia. It considers the objectives of road pricing, and demonstrates that differences in objectives lead to differences in scheme design and performance. It reviews the criteria for design of road pricing systems, and the development of charging structures and technologies to meet those criteria. In particular it discusses the relative merits of pre-determined and congestion-dependent charging structures, and of off-vehicle and on-vehicle charging systems. It assesses the performance of road pricing systems to date, discusses objections to road pricing and demonstrates that the role of road pricing within a wider transport strategy and the use made of the revenue generated, will be important determinants of public acceptability. Finally it assesses the relative merits of alternative approaches to implementation and argues that these will need to pay as much regard to public acceptability as to technical performance.     

Context-dependent influence of road attributes and pricing policies on route choice behavior of truck drivers: results of a conjoint choice experiment

In this paper, we report the results of a stated choice experiment, which was conducted to examine truck drivers?? route choice behavior. Of particular interest are the questions (i) what is the relative importance of road accessibility considerations via-a-vis traditional factors influencing route choice behavior, (ii) what are the influences of particular personal and situational variables on the evaluation of route attributes, (iii) how sensitive are truck drivers for possible pricing policies, and (iv) is there a difference in impact if environmental concerns are framed as a bonus or as a pricing instrument. The main findings indicate that road accessibility characteristics have a substantial impact on route preferences which is of the same order of magnitude as variation in travel times. This suggests that provision of adequate travel information in itself can be an effective instrument to prevent negative externalities of good transport associated with shortest routes. Furthermore, the results indicate that truck drivers/route planners when choosing a route are relatively sensitive to road pricing schemes and rather insensitive to environmental bonuses.     

Responses to differentiated road pricing schemes

Reducing traffic-related problems is an important issue that requires changes in travel behavior. It is argued that road pricing is an effective tool but that it would be more effective if charges are differentiated. A laboratory experiment employing a heterogeneous sample (n = 155) examined effects of differentiated road pricing schemes on understanding and behavioral change intentions. The results show that difficulties are experienced in calculating the charges for road pricing schemes differentiated with respect to both place and time. Suggesting learning effects, if presented with degree of differentiation gradually increasing compared to random orders, the highly differentiated schemes were evaluated faster, as more comprehensible, and perceived difficulty decreased. Elderly were less flexible than young people in indicating how they would respond, women were more flexible than men, and frequent drivers less flexible than non-frequent drivers. A distance-based road pricing scheme with a fixed charge per kilometer was on average ranked highest on preference compared to several other conceivable road pricing alternatives.     

Evaluating the benefits of a combined route guidance and road pricing system in a traffic network with recurrent congestion

When drivers do not have complete information on road travel time and thus choose their routes in a stochastic manner or based on their previous experience, separate implementations of either route guidance or road pricing cannot drive a stochastic network flow pattern towards a system optimum in a Wardropian sense. It is thus of interest to consider a combined route guidance and road pricing system. A road guidance system could reduce drivers' uncertainty of travel time through provision of traffic information. A driver who is equipped with a guidance system could be assumed to receive complete information, and hence be able to find the minimum travel time routes in a user-optimal manner, while marginal-cost road pricing could drive a user-optimal flow pattern toward a system optimum. Therefore, a joint implementation of route guidance and road pricing in a network with recurrent congestion could drive a stochastic network flow pattern towards a system optimum, and thus achieve a higher reduction in system travel time. In this paper the interaction between route guidance and road pricing is modeled and the potential benefit of their joint implementation is evaluated based on a mixed equilibrium traffic assignment model. The private and system benefits under marginal-cost pricing and varied levels of market penetration of the information systems are investigated with a small and a large example. It is concluded that the two technologies complement each other and that their joint implementation can reduce travel time more efficiently in a network with recurrent congestion.     

Road pricing for congestion control with unknown demand and cost functions

It is widely recognized that precise estimation of road tolls for various pricing schemes requires a few pieces of information such as origin–destination demand functions, link travel time functions and users’ valuations of travel time savings, which are, however, not all readily available in practice. To circumvent this difficulty, we develop a convergent trial-and-error implementation method for a particular pricing scheme for effective congestion control when both the link travel time functions and demand functions are unknown. The congestion control problem of interest is also known as the traffic restraint and road pricing problem, which aims at finding a set of effective link toll patterns to reduce link flows to below a desirable target level. For the generalized traffic equilibrium problem formulated as variational inequalities, we propose an iterative two-stage approach with a self-adaptive step size to update the link toll pattern based on the observed link flows and given flow restraint levels. Link travel time and demand functions and users’ value of time are not needed. The convergence of the iterative toll adjustment algorithm is established theoretically and demonstrated on a set of numerical examples.     

Road Pricing models with maintenance cost

According to the Federal Highway Administration of the United States, maintenance expenditure takes up more than 25% of road revenue disbursement and this percentage has been increasing gradually. The reason for the increment in maintenance cost is that there lacks incentives for road users to take this cost component into their driving behavior. That is, different classes of vehicles should be levied different levels of congestion tax due to the different degrees of damage on the highway if a road pricing policy is implemented. This paper intends to incorporate this concept into road pricing literature by introducing two types of vehicles. After the analysis of the problem, we find that different types of vehicles should be charged different tolls. The toll includes not only the travel delay cost of one's own vehicle and the other types of vehicles, but also the marginal maintenance cost that is dependent on the traffic flow. A set of numerical examples is provided to demonstrate the theoretical analyses. The result shows that both the welfare and cost coverage rate will increase when the road pricing mechanism takes the maintenance cost factor into account.     

Optimization of tunnel tolls in land use and transport planning

The task of transport planning is to determine cost-effective methods of providing and improving mobility, which can include minimizing traffic congestion. A cost-effective solution to transport problems should consist of a land use pattern, a transport system an a set of road pricing policies that together bring demand and supply into balance in an efficient and equitable way. The conventional approach aimed to produce comprehensive, long-term plans for land use and transport in considerable detail, but tended to ignore the role of road pricing policy, thus ending up with solutions that might not be efficient or economical. This feature of sub-optimal road pricing policy is accentuated by the overall growth in car use, which has generated problems with the efficient use of road space. This paper presents a computer analysis system (or model) which will enable the analysis of coordinated tunnel toll pricing policies by optimising an “objective function” while satisfying the associated and other constraints. The possibility of integrating the optimal road pricing policies in the land use and transport planning are discussed. A case study based on Hong Kong data demonstrates the efficiency of optimizing tolls on two of the three harbour crossing tunnels in Hong Kong.     

Optimal toll locations and toll levels in congestion pricing schemes: a case study of Stockholm

As congestion pricing has moved from theoretical ideas in the literature to real-world implementation, the need for decision support when designing pricing schemes has become evident. This paper deals with the problem of finding optimal toll levels and locations in a road traffic network and presents a case study of Stockholm. The optimisation problem of finding optimal toll levels, given a predetermined cordon, and the problem of finding both optimal toll locations and levels are presented, and previously developed heuristics are used for solving these problems. For the Stockholm case study, the possible welfare gains of optimising toll levels in the current cordon and optimising both toll locations and their corresponding toll levels are evaluated. It is shown that by tuning the toll levels in the current congestion pricing cordon used in Stockholm, the welfare gain can be increased significantly, and furthermore improved by allowing a toll on a major bypass highway. It is also shown that, by optimising both toll locations and levels, a congestion pricing scheme with welfare gain close to what can be achieved by marginal social cost pricing can be designed with tolls being located on only a quarter of the tollable links.     

Road pricing: some further comments

This paper extends the discussion of certain problems associated with road pricing raised in an earlier contribution to this journal. Firstly it is shown that where the value of time varies between different groups of traffic using the same congested road, optimal road pricing requires price discrimination between the groups such that those with the lowest value of time pay the highest charge and suffer the greatest losses. However, a uniform price based on an “equity” value of time would reduce the relative distributional effects. Secondly the paper takes up the suggestion that queueing (and by extension congestion) may be positively helpful in the allocation of resources and shows that this is not in general correct although there are situations in which the use of queueing alongside conventional pricing may have a role to play. Finally it is argued that governments’ apparent lack of enthusiasm for road pricing stems as much from political considerations as the more technical problems of applying it.     

What type of road pricing scheme might appeal to politicians? Viewpoints on the challenge in gaining the citizen and public servant vote by staging reform

The greatest hurdle facing road pricing reform is political commitment. With rare exception, efforts to introduce significant reform in road pricing, aimed at raising sufficient revenue to ensure that road investment and ongoing maintenance is secured, without an additional impost to users above current outlays, while at the same time reducing traffic congestion, has fallen largely on politically non-supportive ears. The big challenge is to convince politicians (and their advisers) that it is possible to reform road pricing so that users are made better off (at least the great majority) in terms of time spent travelling and monies outlaid, and that government secures growing levels of revenue, but with at least some funds being used to improve public transport and the existing road network. This paper identifies the major issues that make much of the academic research into road pricing somewhat limited in terms of achieving real change. Staging reform is an appealing way forward, but ensuring the order and timing of events to secure progress is the big challenge. We offer some suggestions, including some ideas on new language designed to increase the level of buy in, and recognise that progress through action will require compromises in respect of an ‘ideal’ economically efficient pricing reform agenda.     

Air pollution dynamics and the need for temporally differentiated road pricing

In this paper we investigate the effects of the temporal variation of pollution dispersion, traffic flows and vehicular emissions on pollution concentration and illustrate the need for temporally differentiated road pricing through an application to the case of the congestion charge in Stockholm, Sweden. By accounting explicitly for the role of pollution dispersion on optimal road pricing, we allow for a more comprehensive view of the economy–ecology interactions at stake, showing that price differentiation is an optimal response to the physical environment. Most congestion charges in place incorporate price bands to mitigate congestion. Our analysis indicates that, to ensure compliance with air quality standards, such price variations should also be a response to limited pollution dispersion.     

The socio-cognitive links between road pricing acceptability and changes in travel-behavior

The objective of this study is to examine the effect of road pricing on people’s tendency to adapt their current travel behavior. To this end, the relationship between changes in activity-travel behavior on the one hand and public acceptability and its most important determinants on the other are investigated by means of a stated adaptation experiment. Using a two-stage hierarchical model, it was found that behavioral changes themselves are not dependent on the perceived acceptability of road pricing itself, and that only a small amount of the variability in the behavioral changes were explained by socio-cognitive factors. The lesson for policy makers is that road pricing charges must surpass a minimum threshold in order to entice changes in activity-travel behavior and that the benefits of road pricing should be clearly communicated, taking into account the needs and abilities of different types of travelers. Secondly, earlier findings concerning the acceptability of push measures were validated, supporting transferability of results. In line with other studies, effectiveness, fairness and personal norm all had a significant direct impact on perceived acceptability. Finally, the relevance of using latent factors rather than aggregate indicators was underlined.