7 ms·

Principles of Efficient Congestion Pricing (1992)

35 points by Diesel555 4y ago

Diesel555 4y ago
As the discussion of equity is always tied to congestion pricing, here is a study from RAND titled Equity and Congestion Pricing [pdf]. The Summary at the beginning covers most of the findings. https://www.rand.org/content/dam/rand/pubs/technical_reports/2009/RAND_TR680.pdf https://www.rand.org/content/dam/rand/pubs/technical_reports... > First, depending on how congestion pricing is implemented, it can be either regressive or progressive. This depends in large part on how toll revenues are used. For instance, if regions spend revenues in ways that benefit low-income individuals, congestion pricing is more likely to be progressive. However, if regions use revenues in a way that benefits all individuals equally, congestion pricing may be, overall, regressive. This is the strongest finding in the economic literature. > Second, even when low-income and other transportation-disadvantaged groups benefit as a whole from congestion pricing, it is very likely that some individuals will still be worse off. > Third, for all forms of congestion pricing (but more for some than for others), the distri- bution of residents and job opportunities (not to mention shopping, schools, places of worship, and other important destinations) has a large impact on the equity implications. > Fourth, high-occupancy toll (HOT) lanes, the most common form of congestion pricing in the United States, tend to raise fewer equity concerns among motorists, since they provide drivers with an additional choice of using a set of priced lanes while allowing them to continue using parallel, free lanes if they prefer. > Fifth, while congestion pricing has been shown to reduce emissions in general, there is scant evidence showing that congestion pricing can specifically reduce negative environmental consequences for neighborhoods disproportionately affected by emissions. > Given the risk of negative impacts to low-income and other groups under congestion pric- ing, we looked at suggested ways to diminish these impacts. Two mechanisms are in common use: (1) revenue redistribution and (2) discounts and exemptions.
- bombcar 4y ago
  The pricing itself is regressive or progressive regardless of how the revenue is spent - it can just compound the issue if it is not spent well. Unless there is some sort of exemption it effectively becomes “ban poors from cars” - which may entirely be the desired result.
  - zeroonetwothree 4y ago
    Poor people already mostly can’t afford cars. Only about 25% of people in the bottom 10% of income have a car. If we want to help poor people we should just give them money rather than indirect subsidies that mainly favor wealthier people with cars.
    - bombcar 4y ago
      Agreed - but if you increase that to people from a household with a car, I bet the number increases. And if people are getting dropped off at work and later picked up, they’ll get dinged twice. Unless the city was really built around transit (and not just once developed in a hub and spoke like so many cities) it’s hard to beat a car door to door. That’s what we should be focusing on fixing (things like inter borough travel in NYC). Massive congestion charges might be part of that, however.
      - namibj 4y ago
        I'd propose a somewhat automatic congestion toll: the toll for a segment of road adapts to keep (assuming only car traffic; extension makes it less trivial but by no means impossible) the road just about empty enough to let everyone drive at the design speed (AFAIK 90 mph for most of the US interstate network). The effect is that the mechanism prevents significant latency degradation from demand. While it's not necessarily possible to go that far over night, looking at how much of the traffic/congestion is from cars, and how many occupants they have, should allow to calculate what reduction perfect car pooling (with, say, 4 people per car) would allow, and at what speed that reduced number of cars could drive (without tailgating). Then, add some safety margin and set that reduced speed as the target for the auto-toll-pricing. If car pooling physically can't fix the congestion, it'd take a bit for the problematic roads to get enough (mini)bus service to enable the full design speed. WFH isn't the solution, and proper mass transit takes a while (5-10 years) to build even if you're in a hurry.
zhoujianfu 4y ago
Wouldn’t the best way to do congestion pricing be to simply optimize for maximum revenue (which you then mostly redistribute either equally or progressively)? I feel like the way to maximize revenue would just be to try either raising or lowering the price (by say 20%?) every n (5-10?) minutes, and see if your revenue goes up or down. If it goes up, continue what you’re doing, and if it goes down, reverse it?
- jeffbee 4y ago
  What if maximizing revenue doesn’t relieve congestion? Raising money is not a goal of congestion pricing.
- spangry 4y ago
  Revenue maximisation in this case is not a great goal. The idea behind congestion pricing is to price-ration road-usage so that people make socially optimal use of roads (which in theory is achieved by setting prices at marginal social cost). Pricing should vary in line with road congestion so that people respond by altering their road usage patterns (e.g. shifting working hours so their commute is outside of peak times, make road deliveries in non-peak hours etc.) If you go for revenue maximisation you won't be setting prices at the social welfare maximising level. Also, you'd probably want to charge higher prices for heavier vehicles as they cause more road damage per unit of distance travelled.
  - kqr 4y ago
    > (which in theory is achieved by setting prices at marginal social cost). This sounds really clever but I don't get it. Do you have a link to a more thorough explanation?
- bombcar 4y ago
  People can’t change what they’re doing that fast - you’d have to do it over weeks or months. The goal is to tip the balance from “30 min drive vs 1 hour transit” to “30 min drive + 10€ vs 1 hour transit” and if the equation keeps changing people will feel trapped.
f7fg_u-_h 4y ago
One thing that the author misses is that a dollar spent on congestion charges doesn't matter the same to everyone. A fancy lawyer probably doesn't even think about a $10 toll but a grocery cashier probably would drive an extremely inefficient route to avoid that toll. I think we need to find a way to "charge" people in a way that matters equally to everyone. I usually advocate for things in terms of time (community service hours) because that perfectly hedges against the person's wage level. Although I suppose given their tax receipts we could just adjust the monetary charge for their observed hourly wage. Any other ideas for adjusting "charges" to have equal importance for different people?
- imtringued 4y ago
  That's illogical. If there is congestion the problem is that the method of transportation is too inefficient. Smaller vehicles like bicycles are more efficient at slow speeds, during congestion speed is low to begin with. The right answer is to tax inefficient vehicles more and efficient vehicles less.
  - deleted 4y ago
    [deleted]
- martinald 4y ago
  Another way would be to link the toll to your average monthly earnings.
- ruddct 4y ago
  We don’t price much of anything like this, though? There are subsidies for low-income people, sure. But we don’t really do sliding scale payments for food, or public transit, or cars, etc etc etc. Why does scarce road space in highly-congested (and well-connected) CBDs require a sliding scale when little else does?
  - hahajk 4y ago
    It’s different than grocery stores and plumbers I think because roads are seen as a public good, and if they’re using space in a crowded city, that space was/is also a public resource. Since everyone contributes their individual sovereignty equally, there’s a sense that govt should serve everyone’s interests equal, as best it can.
erwincoumans 4y ago
Congestion pricing (can) increase inequality, favoring the people able/willing to pay: without it, everyone 'pays' in time delays. This is related to recent discussion on HN on scaling fines based on income or wealth: https://news.ycombinator.com/item?id=31176458 https://news.ycombinator.com/item?id=31176458
- zeroonetwothree 4y ago
  It doesn’t favor the rich, it favors those willing to pay. But that’s true of any purchase in a market economy.
  - erwincoumans 4y ago
    Not if the purchase/fine is 'paid' in waiting/delay time, time becomes an equalizer. And thanks, fixed the 'willing to pay' part.
  - kqr 4y ago
    Words are funny. I'd argue it favours those able to pay. I think "willing" is the wrong word because people aren't transporting themselves for fun, most of the time. Personal transport is a rather inflexible demand. And those able to pay are, in our society, generally the rich.
    - youainti 4y ago
      Willing and able to pay is the most accurate description. Typically decisions to purchase are described as constrained optimization problems with the constraint typically being a budget constraint.
jplr8922 4y ago
Principles of congestion pricing were applied rather successfully in electricity markets. Having public congestion prices for electricity makes it easier for investor to understand what needs funding ; do we need more power plants, or more electric lines? I whish these principles could be applied elsewhere, since ''congestion pricing'' often reflect the need for better systemic public infrastructure (aka a network or a market maintenance cost), while ''regular prices'' are often tied to private business (aka a node, or an entrepreneur).
twobitshifter 4y ago
I’m interested in the studies that will come out using pandemic traffic data and public surveys. There’s been a dramatic shift in commuting from 3 years ago and I wonder if we’ll return to the same sort of gridlock. Some questions: If companies broadly reject work from home policies would they also reject peak shifting policies? Are workers interested in returning to offices and then working odd hours? If everyone adopts hybrid schedules does it just drop white collar commuters by 40%? If traffic stays light and downtowns are empty, which transit or highway projects are now needed or may no longer be needed?
- dragonwriter 4y ago
  > There’s been a dramatic shift in commuting from 3 years ago and I wonder if we’ll return to the same sort of gridlock. AFAICT, we largely have in my area. The durable changes seems to for a very narrow slice of the workforce, which I am fortunate enough to be in, but whenever I have a (non-commuting) reason to drive in normal commute hours, it already looks pretty similar to pre-pandemic, even while the process of orgs announcing rollbacks of regular telecommuting continues.
- vladvasiliu 4y ago
  I share your interest in these studies, and was quite hopeful to see traffic go down in my neck of the woods. Didn't happen. > If companies broadly reject work from home policies would they also reject peak shifting policies? This has actually been "recommended" by the French government after the first lockdown ended. Of course, I haven't actually measured this, but my subjective impression is that basically nobody applied this, not even in public transport. During peak hour trains were still very full, despite some employers allowing partial remote working. The issue, at least is France, is that the workday is basically 9 AM to 6 PM. Add to that an hour of commute and stores outside big cities closing around 8 PM (ie where people have long commutes), and people can't shift the work day later. They could shift it earlier, but they usually don't like getting up early, and there also seems to be, to some, some kind of stigma attached to people leaving "early".

35 points by Diesel555 4y ago

As the discussion of equity is always tied to congestion pricing, here is a study from RAND titled Equity and Congestion Pricing [pdf]. The Summary at the beginning covers most of the findings. https://www.rand.org/content/dam/rand/pubs/technical_reports/2009/RAND_TR680.pdf https://www.rand.org/content/dam/rand/pubs/technical_reports... > First, depending on how congestion pricing is implemented, it can be either regressive or progressive. This depends in large part on how toll revenues are used. For instance, if regions spend revenues in ways that benefit low-income individuals, congestion pricing is more likely to be progressive. However, if regions use revenues in a way that benefits all individuals equally, congestion pricing may be, overall, regressive. This is the strongest finding in the economic literature. > Second, even when low-income and other transportation-disadvantaged groups benefit as a whole from congestion pricing, it is very likely that some individuals will still be worse off. > Third, for all forms of congestion pricing (but more for some than for others), the distri- bution of residents and job opportunities (not to mention shopping, schools, places of worship, and other important destinations) has a large impact on the equity implications. > Fourth, high-occupancy toll (HOT) lanes, the most common form of congestion pricing in the United States, tend to raise fewer equity concerns among motorists, since they provide drivers with an additional choice of using a set of priced lanes while allowing them to continue using parallel, free lanes if they prefer. > Fifth, while congestion pricing has been shown to reduce emissions in general, there is scant evidence showing that congestion pricing can specifically reduce negative environmental consequences for neighborhoods disproportionately affected by emissions. > Given the risk of negative impacts to low-income and other groups under congestion pric- ing, we looked at suggested ways to diminish these impacts. Two mechanisms are in common use: (1) revenue redistribution and (2) discounts and exemptions.

bombcar 4y ago
The pricing itself is regressive or progressive regardless of how the revenue is spent - it can just compound the issue if it is not spent well. Unless there is some sort of exemption it effectively becomes “ban poors from cars” - which may entirely be the desired result.
- zeroonetwothree 4y ago
  Poor people already mostly can’t afford cars. Only about 25% of people in the bottom 10% of income have a car. If we want to help poor people we should just give them money rather than indirect subsidies that mainly favor wealthier people with cars.
  - bombcar 4y ago
    Agreed - but if you increase that to people from a household with a car, I bet the number increases. And if people are getting dropped off at work and later picked up, they’ll get dinged twice. Unless the city was really built around transit (and not just once developed in a hub and spoke like so many cities) it’s hard to beat a car door to door. That’s what we should be focusing on fixing (things like inter borough travel in NYC). Massive congestion charges might be part of that, however.
    - namibj 4y ago
      I'd propose a somewhat automatic congestion toll: the toll for a segment of road adapts to keep (assuming only car traffic; extension makes it less trivial but by no means impossible) the road just about empty enough to let everyone drive at the design speed (AFAIK 90 mph for most of the US interstate network). The effect is that the mechanism prevents significant latency degradation from demand. While it's not necessarily possible to go that far over night, looking at how much of the traffic/congestion is from cars, and how many occupants they have, should allow to calculate what reduction perfect car pooling (with, say, 4 people per car) would allow, and at what speed that reduced number of cars could drive (without tailgating). Then, add some safety margin and set that reduced speed as the target for the auto-toll-pricing. If car pooling physically can't fix the congestion, it'd take a bit for the problematic roads to get enough (mini)bus service to enable the full design speed. WFH isn't the solution, and proper mass transit takes a while (5-10 years) to build even if you're in a hurry.

zhoujianfu 4y ago

Wouldn’t the best way to do congestion pricing be to simply optimize for maximum revenue (which you then mostly redistribute either equally or progressively)? I feel like the way to maximize revenue would just be to try either raising or lowering the price (by say 20%?) every n (5-10?) minutes, and see if your revenue goes up or down. If it goes up, continue what you’re doing, and if it goes down, reverse it?

jeffbee 4y ago
What if maximizing revenue doesn’t relieve congestion? Raising money is not a goal of congestion pricing.
spangry 4y ago
Revenue maximisation in this case is not a great goal. The idea behind congestion pricing is to price-ration road-usage so that people make socially optimal use of roads (which in theory is achieved by setting prices at marginal social cost). Pricing should vary in line with road congestion so that people respond by altering their road usage patterns (e.g. shifting working hours so their commute is outside of peak times, make road deliveries in non-peak hours etc.) If you go for revenue maximisation you won't be setting prices at the social welfare maximising level. Also, you'd probably want to charge higher prices for heavier vehicles as they cause more road damage per unit of distance travelled.
- kqr 4y ago
  > (which in theory is achieved by setting prices at marginal social cost). This sounds really clever but I don't get it. Do you have a link to a more thorough explanation?
bombcar 4y ago
People can’t change what they’re doing that fast - you’d have to do it over weeks or months. The goal is to tip the balance from “30 min drive vs 1 hour transit” to “30 min drive + 10€ vs 1 hour transit” and if the equation keeps changing people will feel trapped.

f7fg_u-_h 4y ago

One thing that the author misses is that a dollar spent on congestion charges doesn't matter the same to everyone. A fancy lawyer probably doesn't even think about a $10 toll but a grocery cashier probably would drive an extremely inefficient route to avoid that toll. I think we need to find a way to "charge" people in a way that matters equally to everyone. I usually advocate for things in terms of time (community service hours) because that perfectly hedges against the person's wage level. Although I suppose given their tax receipts we could just adjust the monetary charge for their observed hourly wage. Any other ideas for adjusting "charges" to have equal importance for different people?

imtringued 4y ago
That's illogical. If there is congestion the problem is that the method of transportation is too inefficient. Smaller vehicles like bicycles are more efficient at slow speeds, during congestion speed is low to begin with. The right answer is to tax inefficient vehicles more and efficient vehicles less.
- deleted 4y ago
  [deleted]
martinald 4y ago
Another way would be to link the toll to your average monthly earnings.
ruddct 4y ago
We don’t price much of anything like this, though? There are subsidies for low-income people, sure. But we don’t really do sliding scale payments for food, or public transit, or cars, etc etc etc. Why does scarce road space in highly-congested (and well-connected) CBDs require a sliding scale when little else does?
- hahajk 4y ago
  It’s different than grocery stores and plumbers I think because roads are seen as a public good, and if they’re using space in a crowded city, that space was/is also a public resource. Since everyone contributes their individual sovereignty equally, there’s a sense that govt should serve everyone’s interests equal, as best it can.

erwincoumans 4y ago

Congestion pricing (can) increase inequality, favoring the people able/willing to pay: without it, everyone 'pays' in time delays. This is related to recent discussion on HN on scaling fines based on income or wealth: https://news.ycombinator.com/item?id=31176458 https://news.ycombinator.com/item?id=31176458

zeroonetwothree 4y ago
It doesn’t favor the rich, it favors those willing to pay. But that’s true of any purchase in a market economy.
- erwincoumans 4y ago
  Not if the purchase/fine is 'paid' in waiting/delay time, time becomes an equalizer. And thanks, fixed the 'willing to pay' part.
- kqr 4y ago
  Words are funny. I'd argue it favours those able to pay. I think "willing" is the wrong word because people aren't transporting themselves for fun, most of the time. Personal transport is a rather inflexible demand. And those able to pay are, in our society, generally the rich.
  - youainti 4y ago
    Willing and able to pay is the most accurate description. Typically decisions to purchase are described as constrained optimization problems with the constraint typically being a budget constraint.

jplr8922 4y ago

Principles of congestion pricing were applied rather successfully in electricity markets. Having public congestion prices for electricity makes it easier for investor to understand what needs funding ; do we need more power plants, or more electric lines? I whish these principles could be applied elsewhere, since ''congestion pricing'' often reflect the need for better systemic public infrastructure (aka a network or a market maintenance cost), while ''regular prices'' are often tied to private business (aka a node, or an entrepreneur).

twobitshifter 4y ago

I’m interested in the studies that will come out using pandemic traffic data and public surveys. There’s been a dramatic shift in commuting from 3 years ago and I wonder if we’ll return to the same sort of gridlock. Some questions: If companies broadly reject work from home policies would they also reject peak shifting policies? Are workers interested in returning to offices and then working odd hours? If everyone adopts hybrid schedules does it just drop white collar commuters by 40%? If traffic stays light and downtowns are empty, which transit or highway projects are now needed or may no longer be needed?

dragonwriter 4y ago
> There’s been a dramatic shift in commuting from 3 years ago and I wonder if we’ll return to the same sort of gridlock. AFAICT, we largely have in my area. The durable changes seems to for a very narrow slice of the workforce, which I am fortunate enough to be in, but whenever I have a (non-commuting) reason to drive in normal commute hours, it already looks pretty similar to pre-pandemic, even while the process of orgs announcing rollbacks of regular telecommuting continues.
vladvasiliu 4y ago
I share your interest in these studies, and was quite hopeful to see traffic go down in my neck of the woods. Didn't happen. > If companies broadly reject work from home policies would they also reject peak shifting policies? This has actually been "recommended" by the French government after the first lockdown ended. Of course, I haven't actually measured this, but my subjective impression is that basically nobody applied this, not even in public transport. During peak hour trains were still very full, despite some employers allowing partial remote working. The issue, at least is France, is that the workday is basically 9 AM to 6 PM. Add to that an hour of commute and stores outside big cities closing around 8 PM (ie where people have long commutes), and people can't shift the work day later. They could shift it earlier, but they usually don't like getting up early, and there also seems to be, to some, some kind of stigma attached to people leaving "early".