Are road pricing strategies regressive or progressive? This is a question that has been confronting researchers, practitioners, and policy-makers who seek to implement new mechanisms to raise funds for transportation while simultaneously managing demand. The theoretical literature is mixed, as is the empirical literature. In part, this has to do with the various types of road pricing strategies that are being debated, different definitions of equity, and alternative assumptions about revenue recycling. Despite this seeming complexity, the literature is clear that equity issues are addressable. This paper provides a synthesis of the literature to date on both the theory of equity, as applied to road pricing, and the findings of empirical and simulation studies of the effects of particular implementations of road pricing, and suggested remedies for real or perceived inequities. To summarize, while there are certainly potential issues with equity associated with road pricing, those issues can be addressed with intelligent mechanism design that provides the right incentives to travellers and uses the raised revenues in a way to achieve desired equitable ends. These include cutting other taxes and investing in infrastructure and services.
Bibliographical noteFunding Information:
This research was conducted for Cambridge Systematics as part of the Moving Cooler Project, sponsored by American Association of State Highway and Transportation Officials (AASHTO), American Public Transportation Association (APTA), Environmental Defense Fund (EDF), Federal Highway Administration (FHWA), Federal Transit Administration (FTA), Intelligent Transportation Society of America (ITSA), Natural Resources Defense Council (NRDC), Rockefeller Foundation (Rockefeller), Shell Oil (Shell-USA), Surdna Foundation (Surdna) and the Urban Land Institute (ULI). The author thanks, in particular, Bill Cowart and Arlee Reno, and the comments of three anonymous reviewers. The author is solely responsible for the work.
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