An Integrated Approach to Urban Road Pricing

Abstract

This paper analyses an integrated urban road pricing policy based on an automatic payment system for cars. Like Glazer and Niskanen (2000) it studies congestion tolls with heterogeneous commuters, but focuses on welfare effects and extends their model to include a choice of departure time, as well as travel mode. The author finds that tolls can be welfare improving even if the public transit mode normally used for substitution is also congested. If, for some reason, public transit charges cannot be changed, substitution towards off–peak travel can be stimulated by a combined road toll and parking duties policy made possible by modern automatic vehicle–identification technologies.

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