How to Cure Congestion: more roads, more public transit, or congestion pricing?


The Fundamental Law of Road Congestion: Evidence from US Cities  ( Abstract, Gilles Duranton and Matthew A. Turner, American Economic Review, Oct. 2011)

Yet another paper is reviewed today from an economic viewpoint, concluding that congestion pricing is the only way to reduce congestion. Not even more public transit offers relief. Where pricing has been used, the results in terms of revenue, pollution reduction and less congestion are so evident that public acceptance is clear.

To see Key Quotes and Links to key reports about this post, click HERE

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One Response

  1. As a Londoner and also a pricing expert, I was very interested by these findings and it adds to our own work on pricing and transport.

    I’m writing a paper on London’s Congestion Charge Pricing and the biggest thing come from our research so far is that by introducing the Congestion Charge it made people consider the price of their journey relative to other travel options, which in turn made a link to their environmental impact (although this is not the main driver in their decision making). This then impacted the journey decisions as price was introduced into the decision making process of consumers.

    The technical pricing explanation is that by introducing the congestion charge it changed the customer value equation (http://www.ripestrategic.com/how-we-work/pricing-fundamentals.php). It made travellers now have to find more benefits to using their cars versus public transport – something that had never been expressed to the general traveller before.

    I’d be keen to see any more research you may have on pricing and the environment…

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