Comments on economics, mystery fiction, drama, and art.

Tuesday, January 15, 2008

Toll Roads Once Again

A couple of years ago, we all had a very lengthy discussion about the potential effects of toll prad privatization (in Indiana, primarily, but also touching on Illinois). One thing that we all somehow managed to miss (as I recall, and I'm not going back to check), is that, if tolls rose, particularly on trucks, that traffic would divert to freeways. Well, now comes some evidence. Peter Belker and Michael Swan have looked at traffic on the Ohio Toll Road. Their data come from the early 1990s, in which Ohio raised tolls to pay for construction, and then lowered them. This allows them to measure the effect of increased tolls (although the effect of permanent increases may be different, and the effect of construction congestion may also be relevant. They have estimated that the profit-maximizing toll (about three times the toll charged by the public toll road) would divert about 40% of the truck traffic to non-toll roads. This diversion to roads that are more likely to be two-lane has a number of consequences--traffic slows down, goods take longer to transport, and accidents increase with significant increases in deaths, injuries, and property damage.

More grist to the issue of privatizing toll roads, or, for that atter, simply increasing tolls while leaving the roads under public control.

Take a look at the link, or check out the discussion at Mark Thoma's place.

UPDATE: Take a look at Alex Tabarrok's comments at Marginal Revolution.


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