THE THEORY AND MEASUREMENT OF PRIVATE AND SOCIAL COST OF HIGHWAY CONGESTION

TLDR

The paper applies marginal cost pricing theory to U.S. highways to estimate an efficient system of highway transportation taxation. The study uses traffic flow and velocity data collected by highway engineers, translating these results into a format to analyze efficient vehicle allocation.

Abstract

This paper attempts to apply the theory of marginal cost pricing to the services of the highways in the United States. Empirical evidence suggests that prices are generally much higher than present levels. This implies that gasoline taxes should be increased and special tolls charged in congested areas. The main purpose of the paper is to estimate an efficient system of taxation of highway transportation. The data consists of figures of traffic flow and velocity collected by highway engineers. The engineers' results are translated into a form suitable for answering question about the efficient allocation of vehicles.