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Pareto-improving and revenue-neutral congestion pricing schemes in two-mode traffic networks

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Abstract

This paper studies a Pareto-improving and revenue-neutral congestion pricing scheme on a simple two-mode (highway and transit) network: this scheme aims at simultaneously improving system performance, making every individual user better off, and having zero total revenue. Different Pareto-improving situations are explored when a two-mode transportation system serves for travel groups with different value-of-time (VOT) distributions. Since the congestion pricing scheme suggested here charges transit users negative tolls and automobile users positive tolls, it can be considered as a proper way to implement congestion pricing and transit subsidy in one step, while offsetting the inequity for the poor. For a general VOT distribution of commuters, the condition of Pareto-improving is established, and the impact of the VOT distribution on solving the inequity issue is explored. For a uniform VOT distribution, we show that a Pareto-improving and revenue-neutral pricing scheme always exists for any target modal split pattern that reduces the total system travel time.

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Authors and Affiliations

  1. Department of Civil and Environmental Engineering, Northwestern University, Evanston, IL, 60208, USA

    Yang Liu

  2. Department of Civil Engineering, The Hong Kong University of Science & Technology, Clear Water Bay, Kowloon, Hong Kong, People’s Republic of China

    Xiaolei Guo & Hai Yang

Authors
  1. Yang Liu
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  2. Xiaolei Guo
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  3. Hai Yang
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Correspondence to Xiaolei Guo.

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Liu, Y., Guo, X. & Yang, H. Pareto-improving and revenue-neutral congestion pricing schemes in two-mode traffic networks. Netnomics 10, 123–140 (2009). https://doi.org/10.1007/s11066-008-9018-x

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  • DOI: https://doi.org/10.1007/s11066-008-9018-x

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