Guardrails on priced lanes: Protecting equity while promoting efficiency

Abstract

We examine the fairness of congestion pricing from two perspectives. First, using data from California’s six largest urban areas, we empirically estimate the share of the population that is both economically vulnerable and likely to be impacted by freeway congestion charges. Our estimates suggest that 13 % of households would fall into this category. Second, we consider ways to mitigate burdens for this group. In particular, we compare freeway use to use of other metered network infrastructure, like electricity grids and water systems. We suggest that assistance programs from these utilities provide useful lessons for protecting low-income drivers from road prices, and argue that policymakers would be less constrained in progressively redistributing congestion toll revenue than they would be in redistributing utility revenue.

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