THE DEMAND CURVE UNDER ROAD PRICING AND THE PROBLEM OF POLITICAL FEASIBILITY

Road pricing is widely advocated as a solution to congestion problems. The underlying theory is well developed, and we even have the technol ogy to implement it without toll booths. Only political barriers remai n: Decision makers are reluctant to retrofit tolls on existing highway s because they do not know what circumstances might make such an actio n acceptable to the public. This paper develops a graphical model that displays the interaction between road capacity, user demand, travel s peed and toll charges. The model is then used to analyze the sources o f public resistance to road pricing. Might the potential response to r oad pricing be predicted using data from the new toll roads now being built around the United States? Our model shows it cannot: Political s uccess depends on the demand characteristics at the right-hand side of the demand curve, while toll road data only trace out the left-hand s ide of the curve. Our model also shows situations where the new toll r oads are likely to generate public anger. The Appendix discusses an ex perimental design that uses unobtrusive measures to assess the effect of a transportation project.