DP3176 Estimating Urban Road Congestion Charges

Author(s): David M G Newbery , Georgina Santos

Publication Date: January 2002

Keyword(s): traffic congestion , road pricing , efficient charges , congestion tolls

JEL(s): H11 , H51 , R48

Programme Areas: Public Policy

Link to this Page: www.cepr.org/pubs/dps/DP3176.asp

Economists wishing to analyse road congestion and road pricing have usually relied on link-based speed-flow relationships. These may provide a poor description of urban congestion, which mainly arises from delays at intersections. Using the simulation model SATURN, we investigate the second-best proportional traffic reduction and find that linear speed-flow relations describe network flows quite well in eight English towns, though the predicted congestion costs and charges overstate those apparently required in our second best model. We then confront the results with feasible optimal cordon charges, and find them reasonably correlated, but imperfect predictors.