If Congestion Pricing is So Wonderful Why Are There So Few Examples?

Abstract: Traffic congestion is a serious and costly problem in most large metropolitan areas in the United States. In theory variable tolls can be used to greatly reduce traffic congestion and improve transportation system efficiency. Evidence suggests the potential benefits in reduced travel time, improved travel time predictability, and reduced emissions are very large and far exceed the cost of implementation. The few examples of variably tolled highway facilities have generally produced positive results both in terms of reducing congestion and public acceptance. Despite these successes variable tolling (also known as congestion pricing) has been applied to only a very small fraction of congested highways and no region-wide congestion pricing proposals have been implemented in the United States. This paper considers possible explanations for the reluctance of public entities to implement region-wide congestion pricing programs. The analysis focuses on the objectives of the public entities responsible for transportation, the choices available to them, and the institutional structure that influences the inter-action of the entities.