Comparison of socioeconomic impacts of market-based instruments for mobility management

ABSTRACT This article presents a hypothetical case study built upon empirical data from Florida to compare socioeconomic impacts of three market-based instruments—gasoline tax, mileage fee, and tradable mobility credits or permits—in regulating the vehicle miles traveled in Florida. Our empirical analysis shows that all three instruments are equally effective in achieving the control target, but yield different magnitudes of socioeconomic impacts. An increased gasoline tax leads to the most adverse changes in consumers' surplus and social welfare. In contrast, the changes caused by a tradable credit scheme are smaller. Meanwhile, the distributional effects of the gasoline tax and flat mileage fee are the most regressive, and a well-designed step-fee structure can make the mileage fee policy less regressive. On the other hand, a tradable credit scheme is the most equitable in achieving the control target while maintaining the current level of revenue. When credits are allocated uniformly or in proportion to household size, the scheme is mostly progressive. When the credits are allocated with respect to existing household travel demands, the impacts are fairly uniform among different income groups.