A NOTE ON THE DISTRIBUTIONAL EFFECTS OF ROAD PRICING REMEDIAL TREATMENT (MERPS)

This article examines the proposition that road pricing may have progressive effects. This is unlikely to be the case between high and low income motorists since the former are unlikely to be charged a higher proportion of their income. The benefits are also likely to be disporportionately received by high income motorists. The balance of effects between high and low income groups if all road users are taken into account is ambiguous. This is because gains to low income bus passengers will be offset by losses to low income motorists. It is concluded that road pricing cannot be justified on equity grounds and should only be considered on grounds of efficiency. /TRRL/