There are many studies on the Area Licensing Scheme in Singapore. One of th
e debatable issues is whether or not the congestion toll of $3 is too high.
The main objective of this paper is to develop a simple method for estimat
ing the congestion toll by directly using the commonly available traffic co
unt data. In our sensitivity analysis, we use three different scenarios on
the choice of the value of travel time savings and four different measures
of average wage rates (the national average wage rate the average wage rate
for car owners with or without taking into consideration of employment ben
efits, and the average wage rate per car derived from the average occupancy
per car). The sensitivity analyses led to a general conclusion that by 199
0, the $3 fee was not too high. We also highlight the fact that it is possi
ble to iterate to the optimal congestion toll by comparing the theoretical
congestion toll with the actual toll even when the demand curve is unknown.
(C) 1999 Elsevier Science Ltd. All rights reserved.