Tradeoffs among free-flow speed, capacity, cost, and environmental footprint in highway design

This paper investigates differentiated design standards as a source of capacity additions that are more affordable and have smaller aesthetic and environmental impacts than modern expressways. We consider several tradeoffs, including narrow versus wide lanes and shoulders on an expressway of a given total width, and high-speed expressway versus lower-speed arterial. We quantify the situations in which off-peak traffic is sufficiently great to make it worthwhile to spend more on construction, or to give up some capacity, in order to provide very high off-peak speeds even if peak speeds are limited by congestion. We also consider the implications of differing accident rates. The results support expanding the range of highway designs that are considered when adding capacity to ameliorate urban road congestion.     

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.     

Private Provision of Highways: Economic Issues

Abstract

This paper reviews issues raised by the use of private firms to finance, build, and/or operate highways—issues including cost of capital, level and structure of tolls, and adaptability to unforeseen changes. The public sector’s apparent advantage in cost of capital is at least partly illusory due to differences in tax liability and constraints on the supply of public capital. The evidence for lower costs of construction or operation by private firms is slim. Private firms are likely to promote more efficient pricing. Effective private road provision depends on well‐structured franchise agreements that allow pricing flexibility, restrain market power, enforce a sound debt structure, promote transparency, and foster other social goals.     

Energy policies for passenger motor vehicles

This paper assesses the costs and effectiveness of several energy policies for light-duty motor vehicles in the United States, using a version of the National Energy Modeling System. The policies addressed are higher fuel taxes, tighter vehicle efficiency standards, and financial subsidies and penalties for the purchase of high- and low-efficiency vehicles (feebates). I find that tightening fuel-efficiency standards beyond those currently mandated through 2016, or imposing feebates designed to accomplish similar changes, can achieve by 2030 reductions in energy use by all light-duty passenger vehicles of 7.1–8.4%. A stronger feebate policy has somewhat greater effects, but at a significantly higher unit cost. High fuel taxes, on the order of $2.00 per gallon (2007$), have somewhat greater effects, arguably more favorable cost-effectiveness ratios, and produce their effects much more quickly because they affect the usage rate of both new and used vehicles. Policy costs vary greatly with assumptions about the reason for the apparent myopia commonly observed in consumer demand for fuel efficiency, and with the inclusion or exclusion of ancillary costs of congestion, local air pollution, and accidents.