working paper

Which consumers benefit from congestion tolls?

Publication Date

December 31, 1999

Associated Project

Author(s)

Abstract

Consider a consumer who can choose to travel on a congestible fast mode or on a congestible slow mode. Users who most value time will use the fast mode. A toll on the slow mode can induce some people who initially use that mode to switch to the fast mode. A toll on the slow mode with revenue not returned to users then necessarily reduces the welfare of all users. A toll on the fast mode may raise aggregate consumer surplus.