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.     

Using the revenues from congestion pricing

The economic theory behind congestion pricing relies on using the revenues to help compensate highway users. But can practical methods of using revenues come close to achieving this compensation, and still have salient appeal to important political groups? This paper investigates the possibilities for designing a package of revenue uses that can achieve these twin goals. The suggested approach returns two-thirds of the revenues to travelers through travel allowances and tax reductions, and uses the rest to improve transportation throughout the area, including affected business centers. By replacing regressive sales and fuel taxes, this approach offsets the tendency of the prices alone to have a regressive distributional impact. By lowering taxes, funding new highways, improving transit, and upgrading business centers, the package provides inducements for support from several key interest groups. The potential amounts of money involved are discussed using nationwide data, and in more detail using a case study of ubiquitous facility pricing throughout the Los Angeles region. Illustrative calculations of the effects on various individuals confirm that such a package can create net benefits for a wide spectrum of people and interest groups.     

Peak period tolls: Precepts and prospects

This article presents the economic rationale for road pricing and provides some scale on the magnitude of peak period tolls that might be justified. It discusses the impacts of such tolls on congestion, air quality and economic development and suggests a long term strategy towards areawide implementation of peak period pricing. It discusses current trends which are increasing the likelihood for implementation of congestion pricing and toll roads in the future. In particular, it discusses some aspects of the 1991 Intermodal Surface Transportation Efficiency Act (ISTEA) which will eliminate some of the current restraints on congestion pricing and toll highways.Abbreviations ETC Electronic toll collection - FHWA Federal Highway Administration - HOV High occupancy vehicle - ISTEA Intermodal Surface Transportation Efficiency Act - LOS Level of service - TCM Transportation control measure - V/C Volume-to-capacity ratio - VMT Vehicle mile(s) of travel - vphpl Vehicles per hour per lane     

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.     

Bridge and tunnel toll elasticities in New York

In 1992, the authors carried out a statistical analysis of Triborough Bridge and Tunnel Authority (TBTA) crossings in New York City, to determine the impact of toll increases on traffic volumes and revenue. Using twelve years of monthly time-series data, we developed a set of multiple regression models that estimated traffic volumes on each TBTA bridge and tunnel as a function of the toll level and other explanatory variables. In most cases, the estimated toll elasticities were negative and much less than 1.0 in absolute value; the median toll elasticity for automobiles was found to be –0.10. Our finding that automobile travel demand is highly inelastic with respect to toll rates is consistent with most previous travel demand studies.     

Introducing congestion pricing on a new toll road

This paper proposes a demonstration project to test the effectiveness of congestion pricing in an urban area. It reviews the general theoretical case for such pricing and summarizes recent international interest in congestion pricing. Next, it sets forth the reasons why demonstration projects are needed, both to add to our knowledge about how effective congestion pricing may prove to be, and to address political and other public-acceptance barriers to implementation of the concept. The paper then defines a specific proposed test site for congestion pricing: a new toll road being planned for Orange County, California. It is proposed that instead of charging flat-rate tolls, the transportation agency could charge peak and off-peak tolls, increasing the level of the peak charge each year over a period of up to 10 years unless or until toll revenues decline below the levels forecast under the flat-rate toll alternative. Measurements of traffic flow and ride-sharing behavior would be made, as well as calculations of emission-reduction effects. The paper concludes with a brief discussion of marketing and political considerations involved in conducting such a demonstration.Abbreviations ARB Air Resources Board - AVI Automatic Vehicle Identification - CDMG Corridor Design Management Group - HOV High-occupancy vehicle - SJHTC San Joaquin Hills Transportation Corridor - TCA Transportation Corridor Agency - VMT Vehicle miles traveled     

The analysis of regulation on private highway investment under a build-operate-transfer scheme

The build-operate-transfer (BOT) approach has become an attractive instrument for public facility provision, especially for a project that faces difficulty with public finance. This study analyzes the regulation alternatives on private highway investment under a BOT scheme and their impacts on traffic flows, travel costs, toll, capacity, and social welfare (total user-benefit in the traffic system including congestion). For comparison, five cases are analyzed: (1) No BOT with maximizing welfare, (2) No BOT with breaking even on finance, (3) BOT without regulation, (4) BOT with a minimum flow constraint (the total users will not be less than those in Case 1), and (5) BOT with a maximum travel cost constraint (the travel cost for users on a non-tolled road will not exceed the maximum tolerance). After each case is modeled and simulated on some functional forms, we find that the case of BOT with regulations performs between the cases of maximizing welfare and that of maximizing profit. From the perspective of the government, regulation has less power in a project with low elastic demand. Furthermore, even when the regulation is strict, a high cost-efficient firm with BOT could result in a higher level of social welfare than that without a BOT scheme.     

Dealing with congestion from a regional perspective The case of Massachusetts

Traffic congestion has received considerable public and media attention over the past several years. However, many of the transportation and land use actions offered to deal with the congestion phenomenon focus only on a specific site or at most a subregion of the metropolitan area. This paper argues that congestion in many cases is an areawide phenomenon requiring consideration from a regional and programmatic viewpoint. A ten-point congestion-relief program developed for eastern Massachusetts is described. Actions in this program included those aimed to mitigate current congestion and avoid future congestion through land use management. Four policy areas are emphasized - providing transportation system improvements, managing transportation demand, managing land use, and managing the institutional and funding framework. The paper concludes that because of the political nature of the congestion problem, the congestion-relief program's importance lies more in the message it sends to the public that programmatic action is being taken. The paper also concludes that a regional approach is necessary thus requiring close examination of existing institutions, that demand management is an important component of the strategy, that the private sector has an important role to play, and that the long-term effectiveness of the program relates to the success of attempts to institutionalize efforts into zoning and permit procedures.     

The introduction of innovation in Urban transport

More than 200 new systems of transport have been proposed as solutions to problems of urban congestion. However, very few of these have reached even the prototype stage and practically none at all have ever actually been installed.

The author asks himself why this is so. If an invention is to be introduced into a field which is poorly receptive to innovation, it must not only bring something really new and attractive for the users on the functional level as opposed merely to the technological level, but must also consider the political, industrial, social and human context.

The author gives two examples of innovation conceived and developed at the Battelle Geneva Research Centre: one for private transport, a new system for an electric car which will include the interests of the petrol industry, and the other for public transport, the “Speedaway” sponsored by Dunlop Limited. These two systems will be put on the market shortly and will attempt to fulfill the criteria mentioned above.     

Total cost analysis: An alternative to benefit-cost analysis in evaluating transportation alternatives

This paper explains the theory in support of total cost analysis (TCA) to compare transportation system alternatives. The full costs of each alternative are first aggregated, including travel time costs and monetizable environmental and social costs. Many costs which are considered on the benefits side of the equation in benefit-cost analysis (BCA) as "cost savings" are brought over to the costs side. Total cost differences among alternatives are then traded off against their estimated non-monetized benefits or impacts, just as a consumer trades off product quality against cost before deciding which product he or she will buy. One advantage of TCA over traditional BCA is that the concept of "total cost" is more easily understood by the public and by political decision-makers than BCA concepts such as "net present worth", "benefit-cost ratio" and "internal rate of return". A second advantage is that there is no suggestion that all "benefits" have been considered; decision-makers are free to use their own value judgements to trade off total cost against non-monetizable social, environmental and economic impacts, just as they trade off quality and convenience against cost when purchasing goods and services in their roles as consumers. The TCA approach is demonstrated in this paper through a case study of two systemwide alternatives for the Baltimore, MD urban area.     

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.     

Distance-dependent congestion pricing for downtown zones

A growing literature exploits macroscopic theories of traffic to model congestion pricing policies in downtown zones. This study introduces trip length heterogeneity into this analysis and proposes a usage-based, time-varying congestion toll that alleviates congestion while prioritizing shorter trips. Unlike conventional trip-based tolls the scheme is intended to align the fees paid by drivers with the actual congestion damage they do, and to increase the toll’s benefits as a result.The scheme is intended to maximize the number of people that finish their trips close to their desired times. The usage-based toll is compared to a traditional, trip-based toll which neglects trip length. It is found that, like trip-based tolls, properly designed usage-based tolls alleviate congestion. But they reduce schedule delay more than trip-based tolls and do so with much smaller user fees. As a result usage-based tolls leave most of those who pay with a large welfare gain. This may increase the tolls’ political acceptability.     

An assessment of the political acceptability of congestion pricing

There is renewed interest in implementing congestion pricing in metropolitan areas throughout the US. This paper reviews changes in the transportation policy environment that have led to this renewed interest and identifies the major interest groups that support congestion pricing. A case study is used to demonstrate that significant barriers to congestion pricing implementation continue to exist. The paper concludes with some suggestions for developing politically acceptable pricing alternatives.     

Tradable credits for managing car travel: a review of empirical research and relevant behavioural approaches

Recently, there has been a surge of interest in Tradable Credits (TC) as an alternative measure to manage the growth of personal car use. This paper summarises the results and methodologies of studies that have sought to anticipate the behavioural responses to several proposed TC schemes that target personal travel. In a critical reflection on this work and in an attempt to inspire future research, we argue that future empirical studies on TC behaviours can greatly benefit from insights from the fields of behavioural economics and cognitive psychology. Therefore, in the second part of the paper, we bring together behavioural concepts from these fields that are relevant in a TC decision-making context. Based on observations from current TC studies and the behavioural mechanisms identified in the second part of the paper, we propose promising directions for future research on understanding the impact of TC on personal car travel.     

Public financing of private freight rail infrastructure to reduce highway congestion: A case study of public policy and decision making in the United States

As goods movement continues to increase it is expected to outpace infrastructure capacity in the United States. Moving a larger share of goods by rail rather than truck is a potentially cost effective part of a solution. Freight rail not only offers a substitute for truck trips but is a cleaner, more energy efficient, and safer alternative. Recently a number of private freight rail projects have received public funding. The public funds are aimed at increasing freight rail capacity with the goal of diverting some goods currently moved by truck to rail. While the benefits of moving goods by rail are relatively clear, it is unclear if public decision makers can effectively identify strategic rail investments that will achieve their policy goals. This study critically examines the analytical methods, models, and data that are commonly used to support decisions to provide public funds for private freight rail projects. This is accomplished through a case study of California’s Trade Corridors Improvement Fund program which provided $680 million for 11 freight rail projects. The study’s contributions include identifying critical analytical flaws and challenges affecting the benefit estimates that public funding decisions rely on. Improvements to current evaluation methods are also identified as are regulatory reforms and policy interventions that may offer more effective and reliable outcomes.     

Marginal cost congestion pricing based on the network fundamental diagram

Congestion pricing schemes have been traditionally derived based on analytical representations of travel demand and traffic flows, such as in bottleneck models. A major limitation of these models, especially when applied to urban networks, is the inconsistency with traffic dynamics and related phenomena such as hysteresis and the capacity drop. In this study we propose a new method to derive time-varying tolling schemes using the concept of the Network Fundamental Diagram (NFD). The adopted method is based on marginal cost pricing, while it also enables to account realistically for the dynamics of large and heterogeneous traffic networks. We derive two alternative cordon tolls using network-aggregated traffic flow conditions: a step toll that neglects the spatial distribution of traffic by simply associating the marginal costs of any decrease in production within the NFD to the surplus of traffic; and a step toll that explicitly accounts for how network performance is also influenced by the spatial variance in a 3D-NFD. This pricing framework is implemented in the agent-based simulation model MATSim and applied to a case study of the city of Zurich. The tolling schemes are compared with a uniform toll, and they highlight how the inhomogeneous distribution of traffic may compromise the effectiveness of cordon tolls.     

Urban delivery industry response to cordon pricing, time-distance pricing, and carrier-receiver policies in competitive markets

The paper develops a set of analytical formulations to study the behavior of the urban delivery industry in response to cordon time-of-day pricing, time-distance pricing, and comprehensive financial policies targeting carriers and receivers. This is accomplished by modeling the behavior of receivers in response to financial incentives, and the ensuing behavior of the carrier in response to both pricing and the receivers’ decisions concerning off-hour deliveries. The analytical formulations consider both the base case condition, and a mixed operation with both regular hour and off-hour deliveries; two pricing schemes: cordon time of day, and time-distance pricing; two types of operations: single-tour, and multi-tour carriers; and three different scenarios in terms of profitability of the carrier operation, which include an approximation to the best case, the expected value, and the worst case. The analyses, both theoretical and numerical, highlight the limitations of pricing-only approaches. In the case of cordon time of day pricing, the chief conclusion is that it is of limited use as a freight demand management tool because: (1) in a competitive market the cordon toll cannot be transferred to the receivers as it is a fixed cost and (2) the structure of the cost function, that only provides an incentive to the carrier to switch to the off-hours when all the receivers in the tour switch to the off-hours. The analyses of time-distance pricing clearly indicate that, though its tolls could be transferred to the receivers and provide an incentive for behavior change, the magnitude of the expected toll transfers under real life conditions are too small to have any meaningful impact on receivers choice of delivery times. In essence, the key policy implication is that in order to change the joint behavior of carrier and receivers, financial incentives—or programs that foster unassisted off-hour deliveries—should be made available to receivers in exchange for their commitment to do off-hour deliveries. As the paper proves, if a meaningful number of receivers switch to the off-hours, the carriers are likely to follow suit.     

Effects of incorporating latent and attitudinal information in mode choice models

Abstract

Hybrid choice modelling approaches allow latent variables in mode choice utility functions to be addressed. However, defining attitude and behavior as latent variables is influenced by the researcher's assumptions. Therefore, it is better to capture the effects of latent behavioral and attitudinal factors as latent variables than defining behaviors and attitudes per se. This article uses a hybrid choice model for capturing such latent effects, which will herein be referred to as modal captivity effects in commuting mode choice. Latent modal captivity refers to the unobserved and apparently unexplained attraction towards a specific mode of transportation that is resulting from latent attitude and behavior of passengers in addition to the urban transportation system. In empirical models, the latent modal captivity variables are explained as functions of different observed variables. Empirical models show significant improvement in fitting observed data as well as improved understanding of travel behavior.     

Estimating induced travel for evaluation of metropolitan highway expansion

This paper demonstrates how induced travel can be estimated for incorporation into the evaluation process for highway expansion projects, at a sketch planning level of analysis. The approach is useful especially in cases where four-step urban travel models are either unavailable or are unable to forecast the full induced demand effects. The methodology is applied to a hypothetical freeway expansion analysis. Our analysis suggests that the magnitude of travel induced by highway expansion increases significantly as a function of initial congestion levels prior to expansion. However, under even extreme scenarios of initial congestion and consequent forecasted induced travel, there is a positive impact with respect to congestion relief.     

A solution algorithm for a dynamic deterministic user equilibrium assignment model with departure time choice

Abstract

A route-based combined model of dynamic deterministic route and departure time choice and a solution method for many origin and destination pairs is proposed. The divided linear travel time model is used to calculate the link travel time and to describe the propagation of flow over time. For the calculation of route travel times, the predictive ideal route travel time concept is adopted. Solving the combined model of dynamic deterministic route and departure time choice is shown to be equivalent to solving simultaneously a system of non-linear equations. A Newton-type iterative scheme is proposed to solve this problem. The performance of the proposed solution method is demonstrated using a version of the Sioux Falls network. This shows that the proposed solution method produces good equilibrium solutions with reasonable computational cost.