Congestion Tolling for Mixed Urban Freight and Passenger Traffic

Chaoda, Xie; Xifu, Wang · 2017 · DOAJ

DOI: 10.1051/matecconf/201712402003

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Summary

This paper investigates the welfare effects of optimal congestion tolling in urban traffic systems characterized by mixed freight and passenger users. The research is motivated by empirical evidence showing that freight traffic significantly overlaps with passenger peak hours, yet existing models largely treat users as homogeneous commuters. The authors address two primary questions: how users with heterogeneous, time-varying marginal utilities of time behave when queuing at a bottleneck, and how such behavior affects the welfare distribution under first-best pricing strategies. The study employs a theoretical bottleneck model where users are heterogeneous based on the increasing rate of their marginal utility of time at the destination. This metric serves as a proxy for productivity, distinguishing freight carriers, who often have higher and more variable productivity rates due to payload aggregation, from private commuters. The model assumes fixed travel demand and a single bottleneck with constant capacity. The authors analyze both the no-toll Nash equilibrium and the socially optimal tolling scenario. A numerical simulation is conducted using a bimodal distribution of marginal utility increasing rates to reflect the distinct characteristics of freight and passenger traffic. The results demonstrate that under both no-toll equilibrium and socially optimal tolling, users sort their arrival times according to the increasing rates of their marginal utilities; those with higher rates arrive earlier. The socially optimal toll completely eliminates the queue without altering the order of arrival or the indirect utility of individual users relative to the no-toll equilibrium, provided toll revenues are not redistributed. Consequently, the optimal toll removes the barrier for freight carriers to accept congestion pricing by directly linking the toll to their marginal utility. The study finds that if toll revenues are equally rebated to all users, the optimal tolling scheme constitutes a Pareto improvement over the no-toll equilibrium. Additionally, the analysis reveals that users with higher productivity increasing rates suffer more in terms of utility loss in both scenarios, suggesting that differentiated redistribution of toll revenues could serve as an incentive to improve productivity. The significance of this work lies in its unified treatment of freight and passenger traffic through the lens of heterogeneous marginal utilities. It provides a theoretical justification for congestion pricing that accounts for the specific economic behaviors of freight carriers, who traditionally resist tolling due to fixed cost structures. The findings imply that equal revenue rebates can improve social welfare, while differentiated rebates could encourage productivity enhancements. The paper concludes by suggesting future extensions, such as examining second-best pricing policies or modeling endogenous productivity rates.

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