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Among the main problems in the public sector of the economy are those of road congestion on the one hand and under-utilisation of roads on the other. Partly this is a consequence of inefficient price policies for the use of roads. But road pricing involves many technical and distributional problems. A preliminary survey of the effects suggests that quite simple road pricing systems, such as a differentiated urban rural license fee, may be a most efficient way of introducing road pricing. Tolls on critical access points may be another efficient way of introducing congestion charges. At the same time it is important to attempt to reduce charges on uncongested roads, and this is especially necessary for developing countries. A preliminary survey of the effects of such a rearrangement of road taxation suggest that there would be no marked redistributional effects. But much more work is required on this aspect of road pricing.
KeywordsPublic Sector International Economic Public Finance Access Point Price Policy
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- 1.See for example the so-calledSmeed Report, Road Pricing: the Economic and Technical Possibilities, Her Majesty's Stationery Office, London 1964, and also J. M. Thompson An Evaluation of Two Proposals for Traffic Constraining in Central London,Journal of the Royal Statistical Society (A), Vol. 130 (3), 1967, page 327.Google Scholar
- 2.Fortunately this lack of information does not matter very much. Numerical calculations have shown that the optimum congestion levy is not very sensitive to different assumptions about the responsiveness of motorists to different levels of road prices. This is perhaps an odd but certainly a comforting result See: J. C. Tanner,Pricing the Use of Roads, D.S.I.R. Road Research Lab Note, No. LN/319, 1963 Harmondsworth.Google Scholar
- 3).In a 2.2 mile journey from my house (off Massachusets Ave. near Harvard Square) to M.I.T. I experienced an average speed of about 6 mph during the evening rush hour.Google Scholar
- 4).The interested reader is however referred to theSmeed Report, Road Pricing...London, 1964, page 14–15.Google Scholar
- 5).Ibid The interested reader is however referred to theSmeed Report, Road Pricing...London, 1964, page 20–24.Google Scholar
- 6.It is clear that this result can be achieved if the density is so great that the traffic is reduced to a snail's pace, then a congestion levy that reduces the density may so increase the speed that the flow (the product of the density and the speed) actuallyincreases.Google Scholar
- 7.For some practical cases, see A. A. Walters, The Theory and Measurement of the Costs of Highway Congestion,Econometrica, 1961.Google Scholar
- 8.I have attempted to disentangle one or two strands a little more in myEconomics of Road User Charges.Google Scholar
- 9.See A. A. Walters, Subsidies for Transport?,Lloyds Bank Review No. 83, Jan. 1967, page 22–23.Google Scholar