Why congestion tolling could be good for the consumer: The effects of heterogeneity in the values of schedule delay and time on the effects of tolling

Research output: Working paperProfessional

Abstract

In studying congestion tolling, it is important to account for heterogeneity in preferences of drivers, as ignoring it can bias the welfare gains. We analyse the effects of tolling, in the bottleneck model, with continuous heterogeneity in the value of time and schedule delay. The welfare gain of a time-variant toll increases with heterogeneity in the value of schedule delay. With heterogeneity, tolling makes the arrival ordering more efficient, and this lowers scheduling costs. If there is not much more heterogeneity in the value of time than in the value of schedule delay, then first-best tolling decreases the generalised price for most users. In our model, first-best tolling is not most detrimental for the lowest values of time and schedule delay: it raises prices more for users with an average value of schedule delay and a slightly larger value of time. Further, the lowest values of time are among those who gain most from a public pay-lane.
Original languageEnglish
Place of PublicationAmsterdam
PublisherTinbergen Instituut (TI)
Number of pages21
Publication statusPublished - 2010

Publication series

NameTI Discussion Papers Series
No.10-016/3

Fingerprint

Schedule delay
Congestion
Value of time
Time delay
Welfare gains
Costs

Cite this

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abstract = "In studying congestion tolling, it is important to account for heterogeneity in preferences of drivers, as ignoring it can bias the welfare gains. We analyse the effects of tolling, in the bottleneck model, with continuous heterogeneity in the value of time and schedule delay. The welfare gain of a time-variant toll increases with heterogeneity in the value of schedule delay. With heterogeneity, tolling makes the arrival ordering more efficient, and this lowers scheduling costs. If there is not much more heterogeneity in the value of time than in the value of schedule delay, then first-best tolling decreases the generalised price for most users. In our model, first-best tolling is not most detrimental for the lowest values of time and schedule delay: it raises prices more for users with an average value of schedule delay and a slightly larger value of time. Further, the lowest values of time are among those who gain most from a public pay-lane.",
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Why congestion tolling could be good for the consumer: The effects of heterogeneity in the values of schedule delay and time on the effects of tolling. / van den Berg, V.A.C.; Verhoef, E.T.

Amsterdam : Tinbergen Instituut (TI), 2010. (TI Discussion Papers Series; No. 10-016/3).

Research output: Working paperProfessional

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