01127247

Component

Pricing of roadways opens doors for infrastructure financing, and congestion pricing seeks to address inefficiencies in roadway operations. This paper takes a cost-benefit approach to illuminate how the costs of infrastructure can be offset via pricing, while ascertaining the welfare impacts of flat-toll, standard congestion pricing, and credit-based congestion pricing policies. While most roadway investment decisions focus on travel time savings for existing trips, this work turns to logsum differences (which quantify changes in consumer surplus) for nested logit specifications across two traveler types, two destinations, three modes and three times of day, in order to arrive at welfare- and revenue-maximizing solutions. This behavioral specification is quite flexible, and facilitates benefit-cost calculations (as well as equity analysis), as demonstrated in this paper. The various cases examined suggest significant opportunities for financing new roadway investment while addressing congestion and equity issues, with net gains for both traveler types. Application results illustrate how, even after roadway construction and maintenance costs are covered, receipts may remain to distribute to eligible travelers so that typical travelers can be made better off than if a new, non-tolled road had been constructed. Moreover, tolling both routes (new and old) results in substantially shorter payback periods (5 vs. 20 years) and higher welfare outcomes (in the case of welfare-maximizing tolls with credit distributions to all travelers). The tools and techniques highlighted here illustrate practical methods for identifying welfare-enhancing and cost-recovering investment opportunities, while recognizing multiple user classes and appropriate demand elasticity across times of day, destinations, modes and routes.

01120148

09-0662

English

29p

2009

Transportation Research Board 88th Annual Meeting

DVD

Figures (4) ; References; Tables (4)

Benefit cost analysis; Congestion pricing; Construction and maintenance; Road pricing; Tolls; Traffic congestion; Travel demand; Travel time; Travelers

Transportation infrastructure

Economics; Highways; Operations and Traffic Management; I10: Economics and Administration; I72: Traffic and Transport Planning

Transportation Research Board Annual Meeting 2009 Paper #09-0662

TRIS, TRB

Jan 30 2009 4:54PM