“Congestion Pricing with Heterogeneous Travelers: A general-equilibrium welfare analysis” by Robin LINDSEY
University of Alberta
André de PALMA
Member of the Institut Universitaire de France
Traffic congestion pricing is studied using a general-equilibrium framework that incorporates public goods expenditures, an income tax, a government budget constraint, and preferences for equity. Individuals differ with respect to wages, values of travel time, and the congestion characteristics of their vehicles. Formulae for optimal tolls are derived and decomposed to reveal the separate influences of individual and vehicle heterogeneity, road network effects, fiscal effects and equity concerns. Using an example various tolling regimes are considered, defined by how much of the network is tolled, by whether and how tolls are differentiated by route, and by vehicle and individual characteristics.