Congestion Pricing for the Twin Cities Metropolitan Area

Principal Investigator:

Herbert Mohring, Former University Researcher, Economics

Project Summary:

Technologies now exist that will enable collecting tolls on large transportation networks at modest costs. Adapting these technologies to institute congestion pricing promises to reduce significantly the resource costs of travel during peak traffic periods. We will quantify the effects of congestion pricing in the Twin Cities Metropolitan Area (TCMA) and will identify the congestion pricing systems which seem most promising. Our analyses will use detailed information on peak hour trips and road capacities to determine the effect of congestion pricing on traffic flows. Traffic flows will be determined by assigning each trip to the route which minimizes each traveler's directly borne costs - vehicle operating costs plus tolls plus the value the traveler attaches to travel time. Equilibrium traffic flows will be approximated numerically and the welfare properties of these flows will be analyzed. Our preliminary analyses indicate that congesting pacing would greatly reduce the resource costs of travel in the TCMA but that toll payments would exceed the value of travel-time savings for most auto travelers and, hence, would be opposed by many of them. Particular attention, therefore, will be paid to finding toll-revenue allocations that would transfer enough of the benefits of road pricing to road users to gain widespread support from them for congestion tolling. Attention will also be paid to the effect of congestion pricing on the full cost of travel for peak-period road users in different parts of the TCMA and from different income groups.

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