Road Pricing: Consequences for Traffic, Congestion and Location

Congested roads seem to be an unavoidable characteristic of large cities. Transport economists and planners have regularly suggested that road pricing would be an appropriate and effective instrument in an overall policy to relieve congestion. Politicians and the public at large have usually been quite sceptical, however. In this paper, three ex ante studies of transport and location effects of alternative road pricing systems are presented and compared. Different models estimated with different data sets are applied to calculate the effects. The first two studies deal with the effects on the traffic pattern of a zone-based and a distance-based road pricing system for the Stockholm area, respectively. In the third study, location effects are also included in an analysis of optimal congestion charges in a stylised symmetric city adjusted to resemble Stockholm. All studies indicate a substantial reduction in vehicle distance travelled. For the zone-based system, traffic volumes in the inner city of Stockholm are predicted to decrease by 30% for charged hours at a charge level equivalent to 3 SEK/km. For the distance-based system, traffic volumes in the inner city are predicted to be reduced by 35 and 19% at charge levels of 4 and 2 SEK/km for peak and office hours, respectively. For the case of optimal congestion pricing, the reduction is 25% at an average charge level of 2 SEK/km. Additional effects in the first study are that speed might increase on inner city roads and arterials by around 20%. Moreover, accessibility to activities in the other half of the city will be reduced significantly. The most affected relation is the one between inner northern and inner southern suburbs. In that case, a reduction of the number of vehicle trips by around 30% is predicted. In spite of quite substantial transport effects, the location effects are predicted to be very limited.