01555606

Component

The authors introduce the advantage of behavioral economics into the transportation policy evaluation criteria that traditional economic approaches do not consider. To that end, the authors present a framework for using tax salience as a connection between the dimensions of government policy objectives (such as revenue, behavior change, and public acceptance) with tax instruments (such as car ownership charge, fuel tax, congestion tax, parking fee) meant to influence behavior. Salience is the psychological effect of paying more/less attention to something relative to its context. This paper concerns price saliency with respect to transportation, which the authors define as when actual cost differs from perceived cost depending on aspects of price and payment. A review of relevant literature on policy-making frameworks and tax salience reveals the connection between operational and externality costs, perceived costs to the user, and actual government collected revenue. Salience is proposed as a modifier for adjusting how much is paid by users of the transportation system (revenue), and how much users perceive paying (internalized externality cost), whereby users can internalize the cost of the negative externalities generated by car-related behaviors, and government can attain its objectives. The authors reveal the ambiguity of the equity principle: should a policy be equitable with respect to its actual tax, perceived tax, or effect on behavior? They discuss incorporating into the framework technology, privacy, policy synergies, and proxy instruments. Lastly, the complexities of salience’s relationship with acceptance and technology make it unclear whether decreasing salience is always desirable.

This paper was sponsored by TRB committee ABE20 Transportation Economics.

01550057

15-1133

English

19p

2015

Transportation Research Board 94th Annual Meeting

Digital/other

Figures; References (20)

Behavior; Costs; Economics; Policy making; Revenues; Taxation

Economics; Finance; Highways; Policy; Transportation (General); I10: Economics and Administration; I72: Traffic and Transport Planning

Transportation Research Board Annual Meeting 2015 Paper #15-1133

TRIS, TRB, ATRI

Dec 30 2014 12:27PM