OnDemand WTP Pricing Research

Pricer’s Points: Congestion Management by Congestion Pricing | Muhammad Bukhsh Bhatti

PricersPointsPostHeader2

The urbanisation leads to increase in traffic congestion throughout the world and it is a fact that expansion in road capacity cannot keep pace with the rapid growth in travel demand resulting from increases in population and vehicle ownership. Hence some form of regulatory control is necessary to curtail traffic congestion.

Congestion is mainly an urban problem with little incidence on inter-urban roads. Urban transport is characterised by a regular pattern of peaked demands, with the highest demand occurring during the morning and afternoon peak-periods. In general, whenever road capacity is increased in urban areas (e.g. the widening of a road), traffic grows rapidly due to the release of previously suppressed trips which are regenerated because motorists now choose to use private transport at the desired time of travel. As traffic congestion increases, the peak periods spill over into the adjoining periods resulting in the ‘all day’ peak-periods. This unacceptable state of affairs is brought about by the fact that travel on the roads is free. However there is overcapacity in urban transport if it were possible to spread travel demand uniformly over a 24 hour period. Hence, it is distinctive nature of the cyclic peak/off-peak period demands which leads to significant resource misallocation.

The standard response to solving traffic congestion in the long run by increasing road capacity through investment in the road infrastructure (e.g. dualisation, widening, etc.) seems to induce ever-increasing demand for travel. When road capacity is relatively fixed and fiscal constraints are fully binding, the economically efficient solution is to price the use of roads differentially by setting congestion tolls which reflect the scarcity value of highway services. This is not such a radical proposal since car parking is free at home, but is charged for within central business districts (CBD), representing spatial pricing of road space within a busy area. Congestion pricing should therefore be applied to both time and space.

Criteria for Choosing a Good Road Pricing System

In order to implement the economic principles of road pricing, a good road pricing should include a number of operational requirements. These are divided according to the road users’ point of view, the road authority’s point of view, and society’s point of view.

Read complete blog here:

Congestion Management by Congestion Pricing

BSc. MSc. CEng MICE MCIHT Design Review Lead Qatar Local Roads and Drainage Programme at Parsons Brinckerhoff

1 Comment on "Pricer’s Points: Congestion Management by Congestion Pricing | Muhammad Bukhsh Bhatti"

Trackback | Comments RSS Feed

Post a Comment

WP-SpamFree by Pole Position Marketing