Do Economists Reach A Conclusion on Road Pricing? The Intellectual History of an Idea
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My search of the economic literature did not find a soul who favours traffic jams. Moreover, I find strong consensus among economists on how to reduce traffic jams. Especially in light of modern electronic toll collection, they believe in pricing highway capacity as a scarce resource. Beyond that primary insight, however, there is much disagreement. Economists disagree over how to set tolls, how to cover common costs, what to do with any excess revenues, whether and how “losers” from tolling previously free roads should be compensated, and whether to privatize highways. These disagreements fill a lot of pages, while the main point of agreement is largely taken for granted. Practically all economists who write on the matter agree that where there is significant congestion on highways, the price should not be zero.
Podcast related to this article: Robin Lindsey on the Economics of Road Pricing (EJW Audio, July 2012).