When Efficiency meets Equity in Congestion Pricing and Revenue Refunding Schemes

Abstract

Congestion pricing has long been hailed as a means to mitigate traffic congestion; however, its practical adoption has been limited due to social inequity issues, e.g., low-income users are priced out off certain roads. This issue has spurred interest in the design of equitable mechanisms that refund the collected toll revenues to users. Although revenue refunding has been extensively studied, there has been no characterization of how such schemes can be designed to simultaneously achieve system efficiency and equity objectives.

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