Congestion pricing on a road network: A study using the dynamic equilibrium simulator METROPOLIS

The gradually accelerating pace at which tolls are being implemented or actively considered around the world suggests that road pricing is an idea whose time may finally have come. Nevertheless, various design considerations must be addressed and public acceptability hurdles overcome if road pricing is to become widespread. And to measure the efficiency gains and welfare-distributional effects of road pricing accurately, models need to account for potential behavioural responses to tolls--and in particular adjustments in trip timing. This paper analyzes some road pricing schemes using the dynamic network simulator METROPOLIS: a tool that treats endogenously departure-time decisions as well as mode and route choices of individual travelers. Simulations are conducted for a stylized urban road network that consists of radial arterials and circumferential ring roads, and with trip origins and destinations that are distributed throughout the network. Six types of link-tolling schemes are analyzed: (1) the system optimum which can be supported approximately by imposing time-varying step tolls that eliminate queuing, (2) a set of comprehensive flat (time-independent) tolls, (3,4) second-best flat and step tolls for a toll cordon, and (5,6) second-best flat and step tolls within a charge area. Two results show the superiority of step tolls over flat tolls. First, step tolls easily outperform flat tolls in terms of welfare gains while inducing a smaller shift of trips from auto to transit. Second, step tolls generate smaller revenues than do flat tolls, and consequently have more favourable distributional impacts on travelers.