CONGESTION PRICING: PROMISE AND LIMITATIONS

Abstract

The theoretical case for congestion pricing derives from the rationale that automobile users should pay the full cost of the congestion their use of the road imposes on the public. This would place public road use on a similar basis as the use of many private facilities and services, such as hotels, resorts, telephone, electricity, and airlines, which charge higher prices during periods of peak demand. A congestion fee, claim advocates of peak period pricing, serves as an automatic regulator of demand. Some drivers will shift to alternative, higher-occupancy modes, others will avoid driving in peak periods, and still others might forego trips of marginal utility altogether. Either way, the result will be less traffic, less pollution, and more efficient use of limited highway space.