"The presence of preexisting tax distortions, and the form of revenue recycling, can crucially affect the size -- and possibly even the sign -- of the welfare effect of road pricing schemes. The efficiency gains from recycling congestion tax revenues in other tax reductions can amount to several times the Pigouvian welfare gains from congestion reduction"--Cover.

The presence of preexisting tax distortions, and the form of revenue recycling, can crucially affect the size - and possibly even the sign - of the welfare effect of road pricing schemes. The efficiency gains from recycling congestion tax revenues in other tax reductions can amount to several times the Pigouvian welfare gains from congestion reduction. Parry and Bento explore the interactions between taxes on work-related traffic congestion and preexisting distortionary taxes in the labor market. A congestion tax raises the overall costs of commuting to work and discourages labor force participation at the margin when revenues are returned in lump-sum transfers. The resulting efficiency loss in the labor market can be larger than the Pigouvian efficiency gains from internalizing the congestion externality. By contrast, if congestion tax revenues are used to reduce labor taxes, the net impact on the labor supply is positive and the efficiency gain in the labor market can raise the overall welfare gains of the congestion tax by as much as 100 percent. Recycling congestion tax revenues in public transit subsidies produces a positive, but smaller, impact on the labor supply. In short, Parry and Bento`s results indicate that the presence of preexisting tax distortions, and the form of revenue recycling, can crucially affect the size - and possibly even the sign - of the welfare effect of road pricing schemes. The efficiency gains from recycling congestion tax revenues in other tax reductions can amount to several times the Pigouvian welfare gains from congestion reduction. This paper - a product of Infrastructure and Environment, Development Research Group - is part of a larger effort in the group to study the cost-effectiveness of alternative transport policies. The study was funded by the Bank's Research Support Budget under the research project The Cost-Effectiveness of Alternative Transport Policies (RPO 683-39).

The purpose of the presentation is to analyze the labor market effects of a congestion charge when commuters have continuously distributed value of time. Since a congestion charge raises the cost of commuting to work, it can decrease employment at the extensive margin in a similar way as an income tax. Without any form of revenue recycling, the resulting welfare loss from the decreased employment can even exceed the Pigouvian welfare gain from internalizing the congestion externality. A common conclusion in the literature, when comparing different revenue recycling schemes, is that it in general is more effective to use the revenues to cut taxes in the labor market compared to subsidizing public transport or returning them in a lump-sum transfer. A critical assumption in many of the previous cost-benefit analyses of congestion charges is however that there only exists a single value of time. This is somewhat surprising since one of the main features of a congestion charge is that it sorts people according to their value of time, given the existence of feasible transport alternatives. This paper intends to challenge this conclusion by analyzing how previous results hold if we, instead of using a representative individual, consider a population with a continuously distributed value of time. The model used in the paper is created with the Stockholm congestion charging trial in mind, but the analysis can just as well be applied to any city with a well developed public transport service. In the paper a simple traffic model is embedded within a general equilibrium framework where a large number of individuals with different values of time choose labor supply at the extensive margin and mode of transportation. In contrast to previous models, a modal-choice approach is used to model how the value of time for different individuals affects their choice of travel mode. The disaggregated travel demand model makes it possible to analyze how self-selection of mode choice affects labor supply, total welfare and the relative performance of the different revenue recycling schemes. Special attention will also be given to the distributional impacts of the different recycling schemes.

Addressing the poverty and distributional impacts of carbon pricing reforms is critical for the success of ambitious actions in the fight against climate change. This paper uses a simple framework to systematically review the channels through which carbon pricing can potentially affect poverty and inequality. It finds that the channels differ in important ways along several dimensions. The paper also identifies several key gaps in the current literature and discusses some considerations on how policy designs could take into account the attributes of the channels in mitigating the impacts of carbon pricing reforms on households.

Economic growth and globalisation create traffic growth, leading to congestion, which again increases travel times and costs. Road pricing is an instrument that may efficiently reduce the negative impacts. This volume is a collection of research papers on the use of road pricing. The focus is on passenger transport, and the papers cover a wide range of approaches, including theoretical modelling and empirical studies of road pricing experience from different cities.

Traffic congestion affects towns and cities everywhere and in some places it is regarded as one of the most urgent and important problems in need of a solution. Road pricing is undoubtedly recognised as an effective traffic demand management tool. The recent London congestion charging scheme seems to be showing that public and political opposition is not insurmountable. Thus, the ghost that prevented the introduction of a policy supported by transport economists for over 80 years seems to have disappeared or at least, weakened.The book contains twelve papers useful to different types of audience, such as researchers and postgraduate students, civil servants, policy makers and consultants. The first part is mainly theoretical and concentrates on second-best congestion pricing including pricing in urban contexts, the impact on the performance of the road network, optimal locations and charge levels, dynamic aspects such as time variation of tolls, potential impacts of road pricing on costs and service quality of public transport buses, and efficiency costs and transport sector effects of different types of pricing when they guarantee a balanced budget per mode.The second part contains chapters that describe the schemes in place around the world such as Singapore, Norway, London, and the US. The volume is an update of the state of the art on the subject and the first one to have been written and appear after the London scheme was implemented and to contain an assessment of its preliminary impacts.

The complexity of transportation systems and their negative social and environmental effects are today at the centre of attention. This book focuses on the impact of institutions and regulatory systems on transport systems and travel behaviour. While institutions appear to play an important role in the economic success of many countries, this book considers the extent to which they also support sustainable development.

Based on the work of the STELLA (Sustainable Transport in Europe and Links and Liaisons with America) Focus Group 3, this volume brings together leading transport academics to discuss society behaviour and public/private transport. Theoretical and empirical research from across North America and Europe form the basis of this book, which is composed of twelve chapters that fall into four logical sections. Chapters in the first section provide a contextual overview and survey trends in mobility behaviour and prospects of sustainable transport in the two continents. Chapters in the second section provide comparative assessments of difficulties posed by contemporary transport systems for three particular user groups (low-income, female, and elderly), interventions indicated, and research needed. The third set of chapters survey recent developments in behavioural modelling that lend themselves to the study of the constellation of issues concerning STELLA Focus Group 3. The remaining chapters of the book address critical issues of equity and policy implementation.

This new edition of the seminal textbook The Economics of Urban Transportation incorporates the latest research affecting the design, implementation, pricing, and control of transport systems in towns and cities. The book offers an economic framework for understanding the societal impacts and policy implications of many factors including congestion, traffic safety, climate change, air quality, COVID-19, and newly important developments such as ride-hailing services, electric vehicles, and autonomous vehicles. Rigorous in approach and making use of real-world data and econometric techniques, the third edition features a new chapter on the special challenges of managing the energy that powers transportation systems. It provides fully updated coverage of well-known topics and a rigorous treatment of new ones. All of the basic topics needed to apply economics to urban transportation are included: Forecasting demand for transportation services under various conditions Measuring costs, including those incurred by users and incorporating two new tools to describe congestion in dense urban areas Setting prices under practical constraints Evaluating infrastructure investments Understanding how private and public sectors interact to provide services Written by three of the field’s leading researchers, The Economics of Urban Transportation is essential reading for students, researchers, and practicing professionals in transportation economics, planning, engineering, or related disciplines. With a focus on workable models that can be adapted to future needs, it provides tools for a rapidly changing world.

. . . the book provides ample evidence of the various and often complex issues that arise in road pricing policies. New research is presented on topics mostly neglected in the past (such as the role of firms in rod pricing, or new insights from dynamic network models). Tilmann Rave, Journal of Regional Science Transport pricing is high on the political agenda throughout the world, but as the authors illustrate, governments seeking to implement this often face challenging questions and significant barriers. The associated policy and research questions cannot always be addressed adequately from a mono-disciplinary perspective. This book shows how a multi-disciplinary approach may lead to new types of analysis and insights, contributing to a better understanding of the intricacies of transport pricing and eventually to a potentially more effective and acceptable design of such policies. The study addresses important policy and research themes such as the possible motives for introducing road transport pricing and potential conflicts between these motives, behavioural responses to transport pricing for households and firms, the modelling of transport pricing, and the acceptability of pricing. Studying road transport pricing from a multi-disciplinary perspective, this book will be of great interest to transport policymakers and advisors, transport academics and consultants and students in transport studies.