Congestion Pricing and Demand Management: A Discussion of the Issues

This article reviews the political, technological, and economic issues involved in the formulation of congestion pricing policy. Increased urban congestion combined with increasingly scarce resources is making policymakers consider congestion pricing as an alternative to expanding highway capacity. Past experiences with congestion pricing and other types of demand management are discussed in an attempt to identify problems policymakers may expect to encounter in the US.     

Smart growth strategies,transportation and urban sprawl: simulated futures for Hamilton,Ontario

North American cities have undergone dramatic changes over the last century. Locations that were once inconvenient have become accessible through extensive road networks leading to population decentralization from the traditional urban centre to suburbia, creating polycentric sprawls from once monocentric communities. Hamilton, Ontario is one such city. The decentralization and urban decline of the city is widely attributed to sprawling development. This change in the sociospatial structure creates challenges for transportation planners as we see greater automobile dependency, greater commuting distances and increased congestion. Smart growth policies such as urban residential intensification (URI) aim to increase population densities in the urban core. This exploratory study estimates the benefits of such policies from a transportation aspect. It is predicted that the City of Hamilton will experience household growth of approximately 80,000 households over the period 2005–2031. Using IMULATE, an integrated urban transportation and land‐use model, a variety of development scenarios model this anticipated growth. Changes in vehicular emissions, traffic congestion and energy consumption as a result of URI are examined. Models of the land‐use/transportation relationship demonstrate how increasing population densities within a city's urban centre drastically reduce congestion, emissions and gasoline consumption.     

贵阳市道路拥堵状态时空分布规律研究——基于出租车GPS大数据

利用贵阳市出租车GPS数据,建立ArcGIS空间模型计算路段平均行程速度,以空间数据库和ArcGIS空间分析为技术支撑,分析道路拥堵状态的时空演化规律。结果表明：①路网平均行程速度的时间分布特征具有高度相似性,且工作日与休息日分布差异大;②工作日高峰时段拥堵区域分布主要以老城区为主。休息日总体上呈现离散分布趋势,且晚高峰时段交通状况比早高峰更拥堵;③工作日早高峰交通拥堵路段呈由中心核心区逐渐向外围扩散的趋势,晚高峰呈由外围向中心核心区聚拢趋势。休息日早高峰不明显,晚高峰呈现由外围区域向内聚拢趋势。基于上述时空演化规律,从城市功能分散、城市道路网、城市空间发展、城市公交系统等方面讨论了贵阳市城市道路交通优化调整对策。     

SPATIAL ASYMMETRIC DUOPOLY WITH AN APPLICATION TO BRUSSELS' AIRPORTS*

ABSTRACT In this paper, the problem of a city with access to two firms or facilities (shopping malls, airports, commercial districts) selling a differentiated product (shopping, flights) and/or offering a differentiated workplace is studied. Transport connections to one facility are congested. A model is presented for this asymmetric duopoly game that can be solved for a Nash equilibrium in prices and wages. A comparative statics analysis is used to illustrate the properties of the equilibrium. A numerical model is then applied to the two Brussels airports. Three stylized policies are implemented to address the congestion problem: expansion of transport capacity, congestion pricing, and a direct subsidy to the uncongested facility. Our results indicate that the degree of intrinsic differentiation between the two firms is crucial in determining the difference in profit and market share. Price and wage differences also depend on trip frequency and consumer preferences for diversity. Congestion pricing is the most effective policy tool but all three options are shown to have attractive attributes.     

Dynamic road pricing and the value of time and reliability

High Occupancy Toll (HOT) lanes that use dynamic pricing to manage congestion and generate revenue are increasingly popular. In this paper, we estimate the behavioral response of drivers to dynamic pricing in an HOT lane. The challenge in estimation lies in the simultaneity of price and demand: the structure of dynamic tolling ensures that prices increase as more drivers enter the HOT lane. Prior research has found that higher prices in HOT lanes increase usage. We find that after controlling for simultaneity HOT drivers instead respond to tolls in a manner consistent with economic theory. The average response to a 10 percent increase in the toll is a 1.6 percent reduction in usage. Drivers primarily value travel reliability over time savings, although there is heterogeneity in the relative values of time and reliability based on time of day and destination to or from work. The results highlight the importance of both controlling for simultaneity when estimating demand for dynamically priced toll roads and treating HOT lanes with dynamic prices as a differentiated product with bundled attributes.     

Private Benefits and Public Costs: Policies to Address Suburban Sprawl

The uneven development and disparities that exist in most metropolitan regions are the consequence of a combination of private decisions and public policies. Public policy can also redress some of these inequities and redirect the pattern of growth. The article discusses individual policies—ranging from congestion pricing to regional governance—in detail. Each policy is assessed in terms of its contribution to slowing metropolitan deconcentration, its feasibility of implementation, and its power to redress inequities. Four policies appear most promising: the utilization.of impact fees, especially on a supra-local level; reverse commuting programs; special taxing districts for regionwide amenities; and continued revitalization efforts in the central city     

Pricing, Capacity Choice, and Financing in Transportation Networks

Abstract.  This paper explores interrelations between pricing, capacity choice, and financing in transportation networks. We build on the Mohring‐Harwitz result on self‐financing of optimally designed and priced roads and investigate it in a network environment under various types of second‐best regulation. A small network model with endogenous car ownership demonstrates that optimal congestion pricing and capacity choice over an entire network may cause user prices to increase more in initially mildly congested areas compared to heavily congested areas. Furthermore, a flat kilometer charge under optimal capacity choice may result in first‐best efficiency gains.     

Duopoly prices under congested access*

Abstract. Consider two firms, at different locations, supplying a homogenous good at constant marginal production cost. Consumers incur travel costs to the firm for each unit purchased, and the travel costs increase with the amount of travel to each firm (congestion). When all traffic and all congestion are generated by travel to a duopolist, both the Nash–Bertrand equilibrium prices and the Nash–Cournot equilibrium prices exceed the sum of the marginal production cost and the marginal external travel cost. However, when the road is shared by travelers to the duopolists' facilities and travelers in competitive markets, the Nash–Bertrand duopoly price equals the competitive price and the Nash–Cournot price contains a markup.     

Travel choices? The Central Scotland transport corridor studies

The Central Scotland Transport Corridor Studies (CSTCSs) were announced in 2001 to investigate means of addressing problems of congestion along the A8, A80 and M74. The studies were to be undertaken on the principle of the English multi modal studies, wherein the search for ‘solutions’ to traffic congestion problems involved considering a range of modal options on an equal footing. This paper reviews the outcome of the multi modal studies and, against this background, analyses the decisions arising from the CSTCSs. It suggests that, although the amount of funding to be spent on road schemes — around 76% of the total budget — is undoubtedly high, the Scottish Executive's decisions should probably receive a cautious welcome, even in the context of the ‘sustainable’ transport agenda set out by UK ministers shortly after Labour's election to power in 1997.     

The Rhetorical Side of Transport Planning

A rhetorical approach to transport planning seemingly contradicts the traditional bias towards means-ends rationality and reliance on analytical techniques. However, this approach is useful for understanding transport planning in its present context. Two major causes are suggested for a possibly growing importance of rhetoric. One is the institutional setting of the transport planning authorities; the other is the changing conception of transport planning problems. Some archetypal rhetorical strategies are described, as well as a particular strategy aiming at the acceptance of road pricing. Acknowledging the rhetorical content of transport planning practice implies new challenges for transport planners. A normative framework based on communicative planning theory is outlined. The discussion draws upon case study material from transport planning in Trondheim, Norway.     

Airport delays and metropolitan employment

This study provides the first empirical assessment of the impact airline delays have on urban employment. While previous works have suggested that road congestion can slow down regional development, the influence of air traffic delays on metro‐level jobs has not been examined comprehensively. The present study uses a nine‐year panel of quarterly data, which covers passenger airline traffic and delays at airports across urban areas in the United States. The panel also includes data on total and industry‐specific employment at the metropolitan‐area level. Our empirical estimates of the impact of air traffic on total employment are comparable to previously reported measures in the literature. However, we find that service‐sector employment is less sensitive to air traffic than other studies suggested. We provide new evidence confirming that delays have a negative effect on employment, a finding that is robust to various specifications of our empirical model. Our results indicate that a 10 percent increase in the number of delayed flights leads to up to a 0.15 percent decrease in total and service‐sector employment, a 0.47 percent decline in leisure and hospitality employment, and a 0.7 percent reduction in the employment level of goods‐producing jobs.     

RETAIL AMENITIES AND URBAN SPRAWL

This paper examines the interaction between local retail markets and population density in cities. We demonstrate that welfare costs of urban sprawl need not come only from road congestion or environmental externalities, as often suggested in the literature. A city also forgoes potential agglomeration economies in retail when it settles into a spatially sprawling equilibrium. Our theory predicts an additional spatial equilibrium where the city is inefficiently dense, characterized by strong retail agglomeration economies within the core.     

交通拥堵治理的空间与基础设施政策综述

交通拥堵是制约国内外城市可持续发展的瓶颈问题之一,给城市经济、社会与环境带来诸多负面影响.本文聚焦城市交通拥堵的结构性因素,系统归纳和综述了引导可持续出行行为的空间政策(如城市空间结构和土地利用政策)与基础设施供应侧政策(如道路和公共交通基础设施投资政策),及其在交通拥堵治理上的理论探讨、学术争论焦点、实证分析及当前亟...     

Probing A Traffic Congestion Controversy: A Comment

Ohta (2001) claims to have resolved a die-hard controversy on traffic congestion modeling by defining an inverse aggregate demand function that has traffic density as its argument—in Ohta's terminology the 'primitive term.'Using this demand function, Ohta shows that 'hypercongestion' may very well be an optimal stationary state. This contribution argues that at least if what road users demand is completed trips, and if time spent on the road while traveling implies a cost, then Ohta's approach is fundamentally flawed. Also the conclusion that hypercongestion can be optimal is no longer valid.     

Quenching the Thirst: The Cost of Water in Fragile Environments

Public policy has often addressed the problems of water supply and sanitation from the supply side to the neglect of demand side aspects in developing countries like India. This policy has not only rendered a large number of projects financially unviable but has also resulted in inadequate coverage of aspects such as population and ecological unsustainability. This article, based on household level information from six villages in a water scarce region of India (Rajasthan state), examines inter- and intra-village variations in water use and the costs, direct and indirect, involved in obtaining water. It also estimates households' willingness and ability to pay for water, using the contingent valuation method (CVM). Using qualitative as well as quantitative methods, it is argued that it is the failure of government policy and of institutions which has led to severe water shortages in harsh environments rather than supply or financial bottlenecks per se. While the estimates of price elasticity of water use indicate the feasibility of water pricing in the rural areas, the willingness to pay estimates question the general assumption that rural households are willing to pay 5 per cent of their income/expenditure for water. Various economic and extra economic factors such as household income, low opportunity costs of women and children, and attitudes towards female labour and public goods are vital in influencing the households' willingness to pay for water.     

NETWORK LOADING VERSUS EQUILIBRIUM ESTIMATION OF THE STOCHASTIC ROUTE CHOICE MODEL MAXIMUM LIKELIHOOD AND LEAST SQUARES REVISITED*

Daganzo (1977, 1979), Daganzo and Sheffi (1977), Sheffi (1985), and Sheffi and Daganzo (1980) have used one assumption about traveler behavior in developing estimation techniques for the stochastic route-choice problem and another assumption in predicting flows on networks by using the same model. In estimation, they calculate the congested travel costs of the network links from observed flows on the network, and the network is loaded based on these costs. In prediction, they follow their stochastic user-equilibrium assumption by which travelers evaluate costs using the mean of the observed flows (or equilibrium flows). The travel-cost coefficient obtained from the loading method systematically overestimates the true travel-cost coefficient from which the observed flow data (which must be used in loading) is generated. The estimates of the same coefficient, obtained in this paper, by constraining the estimation results to conform to the equilibrium conditions are unbiased, and only marginally less efficient (have larger standard deviations). The average percentage error and inefficiency of the link flow predictions based on the loading method increases as the level of congestion on the network rises. In contrast, the average percentage error of link flow predictions based on the equilibrium estimation method declines and their efficiency remains very high as the level of congestion on the network rises.     

WHY ARE URBAN TRAVEL TIMES SO STABLE?

Personal travel time in U.S. urban areas has been stable, clashing with the assertion that urban sprawl greatly lengthens travel. Average commute time rises by 7.7 percent with each cross‐sectional doubling of Metropolitan Statistical Area (MSA) jobs. Using the RELU‐TRAN structural computable general equilibrium model of the Chicago MSA, we simulate the equilibrium effects of a 24 percent population increase projected from 2000 to 2030 by the Chicago Metropolitan Agency for Planning. If no new road capacity is added, then congestion per mile increases. Although the urbanized land area increases by 19 percent, indicating sprawl, the vehicle miles traveled (VMT) per car‐trip decreases by 1.31 percent and the VMT per car‐trip to work decreases by 2.78 percent. Car travel time increases by only 6.25 percent and commuting time by only 4.54 percent, from 30.3 minutes in 2000 to 31.7 in 2030 or 3.4 seconds per year. We further explore the effects of new road capacity, gasoline prices, public transit speed, fuel economy gains, limits on suburban construction, and importantly, the cross‐elasticity of public transit use with respect to car times. The availability of public transportation, economizing on nonwork travel, and land use adjustments that increase job‐residence proximity keep times stable.     

Canada and the United States—Trading Partners and Transfer Pricing Opponents?

Given the significant trading relationships between Canada and the United States, their transnational corporations and their tax authorities share more than a border. However, differences in transfer pricing regulations, tax rates, and regulatory enforcement philosophies have exacerbated many existing risks, and created new risks for executives in these corporations. These risks must be managed proactively, yet attempts at risk management are often incompatible with one tax authority or the other. Assuming that an operational transfer pricing framework is in place, there are several proactive strategies available to mitigate transfer pricing risk and potentially satisfy both tax authorities. An operational framework and proactive strategies, including documentation and advance pricing agreements, are discussed from the Canadian and US perspective, including expert interviews.     

Spatial Pricing Policies Reconsidered: Monopoly Performance and Location

This paper reexamines the welfare implications of three pricing regimes (mill, uniform, and discriminatory) for a monopoly. Assuming linear demand and constant marginal costs, I show that with the introduction of endogenous location choice, uniform delivered pricing may provide the highest social welfare when demands in different markets are sufficiently heterogeneous; whereas discriminatory pricing always dominates uniform pricing when demands in different markets are similar.     

Optimal Facility Location in a One-Dimensional Spatial Market

This paper analyzes properties of the optimal spatial arrangement of what may be interpreted as a class of public facilities. Optimality is defined as cost minimization. Three different optimality criteria are considered, and for each, the necessary and, sufficient conditions, market area size, and production levels, are derived. The relationship between optimal production levels and number of facilities needed is also considered. Next the results of implementing various pricing strategies are analyzed with emphasis given to marginal and uniform pricing. It is shown that, given certain conditions, all facilities incur operating deficits, given marginal pricing. Estimates on the level of the deficits are derived in terms of location rents. Finally, in the appendix, several important results from other studies are derived as special cases of the basic model.