The cost of congestion and the benefits of congestion pricing: A general equilibrium analysis
Abstract
The first analysis of metropolitan wide social marginal pricing of road congestion with a spatially detailed computable general equilibrium model of the Los Angeles region. The Pigouvian congestion tolls are no more than 34 cents per mile per day; and as high as $4.20 and as low as zero, and 84 cents per trip on average. The total annual economic benefit is $236 per consumer if only LA County roads are priced or $350 if all roads are priced, with annual toll revenue of $3.02 billion and $4.73 billion respectively; amounting to 3.54% and 5.55% respectively of the total taxes on income, sales, property and wages. Revenues from congestion pricing (LA County only or whole region) are 0.83% and 1.31% of average year-2000 consumer incomes and 0.34% and 0.53% of the regional gross product respectively. Recycling the toll revenue by cutting the income taxes of the lowest income LA County workers, yields a second dividend that raises regional product by 1.34% and almost triples the welfare benefit; the second dividend raises regional product by 0.6% when the sales tax is cut and is essentially zero when the property tax is cut.
- Publication:
-
Transportation Research Part B: Methodological
- Pub Date:
- June 2020
- DOI:
- Bibcode:
- 2020TRPB..136..110A
- Keywords:
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- Pigouvian taxation of road congestion;
- Double dividend;
- Income tax;
- Sales tax;
- Property tax;
- D58;
- D62;
- H23;
- R13;
- R41