Viability of new road infrastructure with heterogeneous users

This paper explores the importance of heterogeneity in value of time and route choice when assessing the viability of new road infrastructure to alleviate congestion problems. The model incorporates strategic interaction between road operators in a cost-benefit framework and several competitive regimes are considered. It is then employed to establish the financial and socio-economic viability of a congestion pricing demonstration entering Madrid city centre, where road users have to choose between a free but highly congested road and a priced free-flowing road (semi-private regime). A logit estimation is undertaken with information from a questionnaire among road users in the Eastern Madrid area to obtain users’ value of time and of congestion.The tolls obtained generate a traffic reallocation towards the new roadway such that revenues suffice to render the infrastructure socio-economically viable. The private and the low toll regimes generate similar welfare gains that are close to the first best. Yet the former supposes large losses to users. The low toll and the semi-private regimes do not raise such distributional concerns. However, the low toll regime requires a sufficiently high traffic growth rate to make it financially viable; this does not happen for the other competitive regimes.     

A monopolistic market for advanced traveller information systems and road use efficiency

Advanced traveller information systems (ATIS) are likely to exhibit significant economies of scale in production and operation. Private provision would therefore typically occur under considerable market power. An important policy question is whether the resulting distortions would aggravate or reduce distortions in the transport market itself, notably external effects such as congestion. We consider such questions by presenting an integrated model that captures the interactions between a congested transport market and a monopolistic market for advanced traveller information systems (ATIS). Three market failures operate simultaneously: congestion on the road, a declining average benefit of information when information penetration rises, and monopolistic pricing by the provider of information. Some key results are as follows. Monopoly information pricing appears not to be the most attractive option from a system efficiency viewpoint. A subsidy in the information market can help realise a second-best optimum of road use. Relatively low uncertainty on the road and high information costs limit the monopolist’s profit on the information market, as well as relative system efficiency. While relatively inelastic demand for mobility, counter intuitively, negatively affects the monopolist’s profit, the relative social benefits from private information peak at intermediate demand elasticities.     

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.     

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.     

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.     

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.     

Network-wide adaptive tolling for connected and automated vehicles

This article proposes Δ-tolling, a simple adaptive pricing scheme which only requires travel time observations and two tuning parameters. These tolls are applied throughout a road network, and can be updated as frequently as travel time observations are made. Notably, Δ-tolling does not require any details of the traffic flow or travel demand models other than travel time observations, rendering it easy to apply in real-time. The flexibility of this tolling scheme is demonstrated in three specific traffic modeling contexts with varying traffic flow and user behavior assumptions: a day-to-day pricing model using static network equilibrium with link delay functions; a within-day adaptive pricing model using the cell transmission model and dynamic routing of vehicles; and a microsimulation of reservation-based intersection control for connected and autonomous vehicles with myopic routing. In all cases, Δ-tolling produces significant benefits over the no-toll case, measured in terms of average travel time and social welfare, while only requiring two parameters to be tuned. Some optimality results are also given for the special case of the static network equilibrium model with BPR-style delay functions.     

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.     

Enhanced traffic information dissemination to facilitate toll road utilization: a nested logit model of a stated preference survey in Texas

This paper investigates the effects of the provision of traffic information on toll road usage based on a stated preference survey conducted in central Texas. Although many researchers have studied congestion pricing and traffic information dissemination extensively, most of them focused on the effects that these instruments individually produce on transportation system performance. Few studies have been conducted to elaborate on the impacts of traffic information dissemination on toll road utilization. In this study, 716 individuals completed a survey to measure representative public opinions and preferences for toll road usage in support of various traffic information dissemination classified by different modes, contents, and timeliness categories. A nested logit model was developed and estimated to identify the significant attributes of traffic information dissemination, traveler commuting patterns, routing behavior, and demographic characteristics, and analyze their impacts on toll road utilization. The results revealed that the travelers using dynamic message sign systems as their primary mode of receiving traffic information are more likely to choose toll roads. The potential toll road users also indicated their desire to obtain traffic information via internet. Information regarding accident locations, road hazard warnings, and congested roads is frequently sought by travelers. Furthermore, high-quality congested road information dissemination can significantly enhance travelers’ preferences of toll road usage. Specifically the study found that travelers anticipated an average travel time saving of about 11.3 min from better information; this is about 30 % of travelers’ average one-way commuting time. The mean value of the time savings was found to be about $11.82 per hour, close to ½ of the average Austin wage rate. The model specifications and result analyses provide in-depth insights in interpreting travelers’ behavioral tendencies of toll road utilization in support of traffic information. The results are also helpful to shape and develop future transportation toll system and transportation policy.     

Bayesian network-based formulation and analysis for toll road utilization supported by traffic information provision

Congestion pricing has been proposed and investigated as an effective means of optimizing traffic assignment, alleviating congestion, and enhancing traffic operation efficiencies. Meanwhile, advanced traffic information dissemination systems, such as Advanced Traveler Information System (ATIS), have been developed and deployed to provide real-time, accurate, and complete network-wide traffic information to facilitate travelers’ trip plans and routing selections. Recent advances in ATIS technologies, especially telecommunication technology, allow dynamic, personalized, and multimodal traffic information to be disseminated and impact travelers’ choices of departure times, alternative routes, and travel modes in the context of congestion pricing. However, few studies were conducted to determine the impact of traffic information dissemination on toll road utilizations. In this study, the effects of the provisions of traffic information on toll road usage are investigated and analyzed based on a stated preference survey conducted in Texas. A Bayesian Network (BN)-based approach is developed to discover travelers’ opinions and preferences for toll road utilization supported by network-wide traffic information provisions. The probabilistic interdependencies among various attributes, including routing choice, departure time, traffic information dissemination mode, content, coverage, commuter demographic information, and travel patterns, are identified and their impacts on toll road usage are quantified. The results indicate that the BN model performs reasonably well in travelers’ preference classifications for toll road utilization and knowledge extraction. The BN Most Probable Explanation (MPE) measurement, probability inference and variable influence analysis results illustrate travelers using highway advisory radio and internet as their primary mode of receiving traffic information are more likely to comply with routing recommendations and use toll roads. Traffic information regarding congested roads, road hazard warnings, and accident locations is of great interest to travelers, who tend to acquire such information and use toll roads more frequently. Travel time formation for home-based trips can considerably enhance travelers’ preferences for toll road usage. Female travelers tend to seek traffic information and utilize toll roads more frequently. As expected, the information provided at both pre-trip and en-route stages can positively influence travelers’ preferences for toll road usage. The proposed methodology and research findings advance our previous study and provide insight into travelers’ behavioral tendencies concerning toll road utilization in support of traffic information dissemination.     

Managing Traffic by Privatization of Road Capacity: A Property Rights Approach

Abstract

Road congestion remains a serious problem, despite all the efforts to limit road use and to manage growing road traffic volumes. Economic approaches (such as pricing) are introduced based on traditional welfare economic theory. Although they are sometimes very successful, the magnitude of traffic issues also requires alternative and unconventional approaches. Perhaps a more innovative perspective is needed. The paper discusses an alternative economic approach starting from property rights theory. It is translated in transport systems in concepts of infrastructure capacity slot management, where slots are dynamically priced and exclusively allocated to individual users. Debates and practices regarding this approach in air traffic and rail traffic are further developed than in the field of road traffic. The paper aims to explore the potential benefits and disadvantages of the property rights approach for road traffic. Attention is paid to major institutional and technical conditions. The conclusion is that the approach theoretically has clear advantages and seems technologically feasible. Nevertheless, serious political and institutional issues have to be solved first.     

Advanced pricing and rationing policies for large scale multimodal networks

The applying of simplified schemes, such as cordon pricing, as second-best solution to the toll network design problem is investigated here in the context of multiclass traffic assignment on multimodal networks. To this end a suitable equilibrium model has been developed, together with an efficient algorithm capable of simulating large scale networks in quite reasonable computer time. This model implements the theoretical framework proposed in a previous work on the toll optimization problem, where the validity of marginal cost pricing for the context at hand is stated. Application of the model to the real case of Rome shows us, not only that on multimodal networks a relevant share (up to 20%) of the maximum improvements in terms of social welfare achievable with marginal cost pricing can in fact be obtained through cordon pricing, but also that in practical terms rationing is a valid alternative to pricing, thus getting around some of the relevant questions (theoretical, technical, social) the latter raises. As a result we propose a practical method to analyze advanced pricing and rationing policies differentiated for user categories, which enables us to compare alternative operative solutions with an upper bound on social welfare based on a solid theoretical background.     

Distinguishing the land use effects of road pricing based on the urban form attributes

This paper studies the effects of road pricing on land use under different development scenarios (business as usual scenario and transit oriented development scenario) by a quantitative method, which combines the integrated land use and transport interaction model (TRANUS model) with the scenario-planning techniques. Moreover, in order to further analyze the differences of the land use effects of road pricing on traffic analysis zones (TAZs) with different urban form attributes, a quantitative classification method combining factor analysis and cluster analysis is then used to quantitatively classify TAZs. The results demonstrate that the effects of road pricing on the land use of a specific region depend on the urban form attributes of the region. The higher the densities of employments and population, and better street design (high densities of street and intersections) and public transportation condition, the less the region is negatively affected by road pricing, and vice versa. More importantly, rail transit can alleviate the negative impact of road pricing on commercial development and population concentration of the region. Therefore, before introducing a road pricing policy, it is necessary to develop public transport system, especially rail transit.     

Welfare evaluation with a road capacity constraint

Severe traffic congestion in and around many cities across the world has resulted in programmes of extensive road building and other capacity increasing projects. But traffic congestion has often not fallen in the long run and neither has journey speed increased. Demand for peak period road travel, particularly by car, has grown so strongly that increases in road capacity have been quickly matched by increased road use. This paper develops a model of a road network characterised by insatiable road passenger (car and bus) demand. The model parameters are calibrated on a typical urban road network, and a number of simulations conducted to determine social welfare after the introduction of a road capacity constraint into the optimisation process. The empirical results have an important policy implication for the evaluation of projects that increase road capacity, namely that standard methods of cost-benefit analysis may tend to overestimate the net benefits of such projects by a significant amount. Although the model is developed in the context of roads and road traffic congestion, it could also be applied to air travel.     

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.     

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.     

A systematic analysis of multimodal transport systems with road space distribution and responsive bus service

A smart design of transport systems involves efficient use and allocation of the limited urban road capacity in the multimodal environment. This paper intends to understand the system-wide effect of dividing the road space to the private and public transport modes and how the public transport service provider responds to the space changes. To this end, the bimodal dynamic user equilibrium is formulated for separated road space. The Macroscopic Fundamental Diagram (MFD) model is employed to depict the dynamics of the automobile traffic for its state-dependent feature, its inclusion of hypercongestion, and its advantage of capturing network topology. The delay of a bus trip depends on the running speed which is in turn affected by bus lane capacity and ridership. Within the proposed bimodal framework, the steady-state equilibrium traffic characteristics and the optimal bus fare and service frequency are analytically derived. The counter-intuitive properties of traffic condition, modal split, and behavior of bus operator in the hypercongestion are identified. To understand the interaction between the transport authority (for system benefit maximization) and the bus operator (for its own benefit maximization), we examine how the bus operator responds to space changes and how the system benefit is influenced with the road space allocation. With responsive bus service, the condition, under which expanding bus lane capacity is beneficial to the system as a whole, has been analytically established. Then the model is applied to the dynamic framework where the space allocation changes with varying demand and demand-responsive bus service. We compare the optimal bus services under different economic objectives, evaluate the system performance of the bimodal network, and explore the dynamic space allocation strategy for the sake of social welfare maximization.     

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.     

Road pricing — an outsider's view of American experiences

Abstract

Substantial changes in urban transport policy have taken place over the past decade. The concern with expanding infrastructure and the preoccupation with providing sufficient road capacity to meet the increasing demand of unrestricted car use, which characterized transport policy in the 1950s and 1960s, has gradually given way to the idea that there is a need to restrain motor traffic if urban society is to function efficiently. A variety of restrictive physical traffic management, land use planning and economic policies have, in consequence, been pursued. One option which has attracted considerable attention in the academic literature, but which has been received more cooly by policy‐makers, is the possibility of optimizing urban traffic congestion through the imposition of road pricing. The introduction and relative success of the area licensing scheme in Singapore has added fuel to the arguments of the advocates of such a policy. This review is not directly concerned with either the experiment with road pricing in Singapore nor the theoretical debates which have taken place concerning the potential merits and defects of such policies but rather looks at the applied work in the United States which has looked into the practical implications of road pricing for its cities. Further, it seeks to explore, again drawing on American experiences, just why there has been so much opposition to the employment of economic pricing principles in the urban road transport market. The author presents the results of an SSRC sponsored study into the practical problems of introducing road pricing to cities in the United States.     

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.