Basic Economic Principles of Road Pricing: From Theory to Applications

J. Rouwendal; E.T. Verhoef

doi:10.1016/j.tranpol.2005.11.007

Basic Economic Principles of Road Pricing: From Theory to Applications

J. Rouwendal, E.T. Verhoef

Spatial Economics

Research output: Contribution to Journal › Article › Academic › peer-review

Abstract

This paper presents, a non-technical introduction to the economic principles relevant for transport pricing design and analysis. We provide the basic rationale behind pricing of externalities, discuss why simple Pigouvian tax rules that equate charges to marginal external costs are not optimal in 'second-best' settings, and discuss the conceptual link between congestion pricing and road capacity. The final part of the paper is devoted to implementation paths for transport pricing policies. A simple numerical model demonstrates how different time patterns of constraints on pricing and capacity policy instruments may lead to different time patterns of efficiency along those implementation paths. © 2006 Elsevier Ltd. All rights reserved.

Original language	English
Pages (from-to)	106-114
Number of pages	8
Journal	Transport Policy
Volume	13
Issue number	2
DOIs	https://doi.org/10.1016/j.tranpol.2005.11.007
Publication status	Published - 2006

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abstract = "This paper presents, a non-technical introduction to the economic principles relevant for transport pricing design and analysis. We provide the basic rationale behind pricing of externalities, discuss why simple Pigouvian tax rules that equate charges to marginal external costs are not optimal in 'second-best' settings, and discuss the conceptual link between congestion pricing and road capacity. The final part of the paper is devoted to implementation paths for transport pricing policies. A simple numerical model demonstrates how different time patterns of constraints on pricing and capacity policy instruments may lead to different time patterns of efficiency along those implementation paths. {\textcopyright} 2006 Elsevier Ltd. All rights reserved.",

author = "J. Rouwendal and E.T. Verhoef",

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AB - This paper presents, a non-technical introduction to the economic principles relevant for transport pricing design and analysis. We provide the basic rationale behind pricing of externalities, discuss why simple Pigouvian tax rules that equate charges to marginal external costs are not optimal in 'second-best' settings, and discuss the conceptual link between congestion pricing and road capacity. The final part of the paper is devoted to implementation paths for transport pricing policies. A simple numerical model demonstrates how different time patterns of constraints on pricing and capacity policy instruments may lead to different time patterns of efficiency along those implementation paths. © 2006 Elsevier Ltd. All rights reserved.

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DO - 10.1016/j.tranpol.2005.11.007

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VL - 13

SP - 106

EP - 114

JO - Transport Policy

JF - Transport Policy

IS - 2

ER -

Basic Economic Principles of Road Pricing: From Theory to Applications

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