IngentaConnect Distributional impacts of road pricing: The truth behind the myth

Authors: Santos G.¹; Rojey L.²

Source: Transportation, Volume 31, Number 1, February 2004 , pp. 21-42(22)

Publisher: Springer

Abstract:

This paper shows that road pricing can be regressive, progressive or neutral, and refutes the generalised idea that road pricing is always regressive. The potential distributional impacts of a road pricing scheme are assessed in three English towns. It is found that impacts are town specific and depend on where people live, where people work and what mode of transport they use to go to work. Initial impacts may be progressive even before any compensation scheme for losers is taken into account. When the situation before the scheme is implemented is such that majority of drivers entering the area where the scheme would operate come from households with incomes above the average, it can be expected that, once the scheme is implemented, these drivers coming from rich households will continue to cross the cordon and will be prepared to pay the charge. In such a case the overall effect will be that on average, rich people will pay the toll and poor people will not.

Keywords: congestion charging; congestion tolls; distributional impacts; regressive effects; road pricing; traffic congestion

Document Type: Research article

Affiliations: 1: Department of Applied Economics, University of Cambridge, Sidgwick Site, CB3 9DE, UK (Author for correspondence, ), Email: georgina.santos@econ.cam.ac.uk 2: Ecole Polytechnique, France

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