The optimal location and road pricing for an elevated road in a corridor

This paper discusses the location decision of an elevated new road in a corridor. The distribution of residents is uniformly located along this corridor and each individual makes trips to the CBD at the end-point of the corridor. Trip demand is elastic and dependent on the cost of a car trip that incorporates congestion cost. The government is assumed to build a new elevated road on this corridor to reduce the traffic congestion, but it has to decide where to locate the entrance of this elevated road. The optimal location of the new elevated road demon the following factors: (1) the set of tolls for the new road and original road; (2) the demand parameters; (3) the travel cost parameters; and (4) the construction cost parameters. We explore the effects of determining the location of an elevated road entrance and the tolls of road pricing on a simple spatial model with a welfare-maximizing objective of the government. The result also shows that, for a given set of tolls, the ratio of taking the elevated road is monotonically decreasing as the location of the entrance is set outward from the CBD. The socially optimal location of the entrance and the second-best toll are obtained from a set of numerical examples.

[1]  J. Mcdonald,et al.  Urban highway congestion , 1995 .

[2]  O. Johansson,et al.  Optimal road-pricing: Simultaneous treatment of time losses, increased fuel consumption, and emissions , 1997 .

[3]  E. Verhoef.  Second-Best Congestion Pricing Schemes in the Monocentric City , 2004 .

[4]  Kurt Van Dender,et al.  Prices, capacities and service quality in a congestible Bertrand duopoly , 2005 .

[5]  M. Marchand.  A NOTE ON OPTIMAL TOLLS IN AN IMPERFECT ENVIRONMENT , 1968 .

[6]  David M Newbery,et al.  Pricing and Congestion: Economic Principles Relevant to Pricing Roads , 1990 .

[7]  J. Maule,et al.  Responses to complex pricing signals: Theory, evidence and implications for road pricing , 2007 .

[8]  Kazuhiro Yoshikawa,et al.  Optimal cordon pricing , 2003 .

[9]  Peter Nijkamp,et al.  Second-best regulation of road transport externalities , 1995 .

[10]  Hai Yang,et al.  Locating and pricing park-and-ride facilities in a linear monocentric city with deterministic mode choice , 2004 .

[11]  Hai Yang,et al.  TRAFFIC RESTRAINT, ROAD PRICING AND NETWORK EQUILIBRIUM , 1997 .

[12]  Lars-Göran Mattsson,et al.  Road pricing: theory, empirical assessment and policy , 1995 .

[13]  Hai Yang,et al.  Principle of marginal-cost pricing : How does it work in a general road network ? , 1998 .

[14]  E. R. Petersen.  A HIGHWAY CORRIDOR PLANNING MODEL: QROAD , 2002 .

[15]  William H. K. Lam,et al.  Optimal road tolls under conditions of queueing and congestion , 1996 .

[16]  D. Newbery,et al.  Road User Charges in Britain , 1988 .

[17]  Marvin Kraus,et al.  When are Anonymous Congestion Charges Consistent with Marginal Cost Pricing? , 1994 .

[18]  CHAPTER 5. WILLINGNESS TO PAY FOR TIME SAVINGS: THE TRONDHEIM TOLL ROAD EXPERIENCES , 1995 .

[19]  Kenneth A. Small,et al.  OPTIMAL HIGHWAY DURABILITY , 1985 .

[20]  S. Lawphongpanich,et al.  Internalizing Emission Externality on Road Networks , 2006 .

[21]  Stef Proost,et al.  Strategic Investment and Pricing Decisions in a Congested Transport Corridor , 2006 .

[22]  J. Mcdonald.  URBAN HIGHWAY CONGESTION. AN ANALYSIS OF SECOND-BEST TOLLS , 1995 .

[23]  O. Johansson-Stenman.  Optimal Environmental Road pricing , 2006 .

[24]  John F. McDonald,et al.  Economic efficiency of second-best congestion pricing schemes in urban highway systems , 1999 .

[25]  D. Newbery,et al.  Cost Recovery from Optimally Designed Roads , 1989 .

[26]  Hong Kam Lo,et al.  TOWARD AN EVALUATION FRAMEWORK FOR ROAD PRICING , 1997 .

[27]  A. Sumalee,et al.  Efficiency and equity comparison of cordon- and area-based road pricing schemes using a trip-chain equilibrium model , 2007 .

[28]  Xiaoning Zhang,et al.  The optimal cordon-based network congestion pricing problem , 2004 .

[29]  C. Winston,et al.  Road Work: A New Highway Pricing and Investment Policy , 1989 .

[30]  Kenneth A. Small,et al.  Optimal Peak-Load Pricing, Investment, and Service Levels on Urban Expressways , 1977, Journal of Political Economy.

[31]  W. Vickrey.  Congestion Theory and Transport Investment , 1969 .

[32]  H. Mohring,et al.  The Peak Load Problem with Increasing Returns and Pricing Constraints , 1970 .

[33]  Kwang Sik Kim,et al.  HIGHWAY INVESTMENT BENEFITS UNDER ALTERNATIVE PRICING REGIMES , 2001 .

[34]  Kazuhiro Yoshikawa,et al.  Optimal cordon pricing in a non-monocentric city , 2005 .

[35]  Erik T. Verhoef,et al.  Second-best road pricing through highway franchising☆ , 2007 .

[36]  E. Verhoef,et al.  Basic Economic Principles of Road Pricing: From Theory to Applications , 2006 .