01023154

Component

This paper reports and extends the findings of an investigation that was conducted on behalf of the UK Department for Transport against the background of proposals to introduce a national road charging scheme whereby drivers might be charged according to the distance they travel on congested roads. The paper addresses a problem inherent in any congestion charging scheme; namely that the theoretically optimum, first-best, pricing structure might be so complicated and dynamically variable that it would be unreasonable to expect road users to predict, let alone respond to, the prices on any given road at any given time - and hence that a better overall result might be achieved with a simpler pricing structure. The project brief required us to consider the extent to which the public could cope with, and respond to, pricing structures such as distance-based charges varying by degree of congestion, time of day and type of road. Existing studies of road pricing schemes and tolls were reviewed to assess what relevant information and evidence already exists. Evidence from other transport modes and other industries (notably telecommunications) was examined and its transferability assessed. The evidence from case studies was evaluated in the light of theories about human decision making and information-processing abilities. Our main conclusions were that people have a strong preference for simple tariffs but that they are able to respond to quite complex tariffs provided that the tariff has a clear and logical structure. However, people's difficulties in estimating distance will severely limit the accuracy of their estimates of distance-based charges and their response to complex pricing signals will be influenced by their attitude to the fairness of the charge. These conclusions are summarized in a general model of response to complex prices. The paper concludes by considering the implications that this has for the design and performance of road pricing schemes.

01020180

06-1414

English

19p

2006

Transportation Research Board 85th Annual Meeting

CD-ROM

References

Complex systems; Decision making; Distance; Mode choice; Pricing; Road pricing; Taxes; Traffic congestion; Transfers; User charges

United Kingdom

Finance; Highways; Operations and Traffic Management; Planning and Forecasting; I72: Traffic and Transport Planning

Transportation Research Board Annual Meeting 2006 Paper #06-1414

TRIS, TRB

Mar 3 2006 10:40AM