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Author: | Berg, V. van den Verhoef, E.T. |
Title: | Winning or losing from dynamic bottleneck pricing? The distributional effects of road pricing with heterogeneity in values of time and schedule delay |
Journal: | Journal of Public Economics
2011 : AUG, VOL 95:7-8 p. 983-992 |
Index terms: | traffic congestion roads pricing externalities taxation transport economics |
Language: | eng |
Abstract: | This paper analyses the efficiency and distributional effects of congestion pricing in Vickrey's (1969) dynamic bottleneck congestion model, permitting continuous distributions of values of time and schedule delay. We find that congestion pricing can improve the situation of a majority of travelers even without directing the toll revenues to them. It is also found that the consumer surplus losses or gains from tolling are not strictly monotonic relative to time, as they also depend on the value of schedule delays. The biggest losses are not caused by drivers with the lowest value of time, but by users with an intermediate schedule delay value and the lowest value of time for that value of schedule delays. For second-best pricing with an untolled option, the pattern of distributional effects is rather similar to that for first-best pricing. Contrary to results from prior static models, users being indifferent between the two alternative routes are not gaining least from this type of second-best pricing. The results suggest that, in evaluating the distributional impacts of road congestion pricing, it is important to consider both the distribution of the value of time and of the value of schedule delays, as well as the dynamics of choosing the departure time. |
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