The University of Southampton
University of Southampton Institutional Repository

Optimal welfare price for a highway competing with an untolled alternative: the influence of income distribution

Optimal welfare price for a highway competing with an untolled alternative: the influence of income distribution
Optimal welfare price for a highway competing with an untolled alternative: the influence of income distribution
In some countries, it is common for two roads with the same origin and destination to compete in the same corridor. Usually one of the roads is a toll highway of better quality, whereas the parallel single road is toll-free. The users have to decide whether it is worth paying for the advantages offered by the toll road. This problem, known as the untolled alternative, has been studied extensively. Particular attention has been paid to calculating the optimal welfare toll that maximizes the economic efficiency. However, there is a gap in the literature regarding how the income distribution affects the optimal toll. The main objective of this paper is to add knowledge in that area by analyzing the influence of the distribution of the values of travel time (VTT) of the users, which is closely related to their income distribution, on the optimal toll price. To solve this problem, the authors defined a mathematical model aimed at obtaining the optimal welfare price for this kind of corridor under the hypothesis that the drivers assume that the average flow conditions will prevail. Under the assumptions made in the paper and for the type of network studied, the results showed that the higher was the average VTT, the higher was the optimal price; and the higher was the dispersion (variance) of this VTT, the lower was the optimal price.
1076-0342
Ortega, Alejandro
a950aa2d-c35a-47d3-8219-12446fc7eaf3
Vassallo, Jose Manuel
7454c521-3295-4af1-84de-8779bdf0ebc8
Perez-Diaz, Juan
771be505-bd91-44aa-b215-dd6f9a900c53
Ortega, Alejandro
a950aa2d-c35a-47d3-8219-12446fc7eaf3
Vassallo, Jose Manuel
7454c521-3295-4af1-84de-8779bdf0ebc8
Perez-Diaz, Juan
771be505-bd91-44aa-b215-dd6f9a900c53

Ortega, Alejandro, Vassallo, Jose Manuel and Perez-Diaz, Juan (2018) Optimal welfare price for a highway competing with an untolled alternative: the influence of income distribution. Journal of Infrastructure Systems. (doi:10.1061/(ASCE)IS.1943-555X.0000412).

Record type: Article

Abstract

In some countries, it is common for two roads with the same origin and destination to compete in the same corridor. Usually one of the roads is a toll highway of better quality, whereas the parallel single road is toll-free. The users have to decide whether it is worth paying for the advantages offered by the toll road. This problem, known as the untolled alternative, has been studied extensively. Particular attention has been paid to calculating the optimal welfare toll that maximizes the economic efficiency. However, there is a gap in the literature regarding how the income distribution affects the optimal toll. The main objective of this paper is to add knowledge in that area by analyzing the influence of the distribution of the values of travel time (VTT) of the users, which is closely related to their income distribution, on the optimal toll price. To solve this problem, the authors defined a mathematical model aimed at obtaining the optimal welfare price for this kind of corridor under the hypothesis that the drivers assume that the average flow conditions will prevail. Under the assumptions made in the paper and for the type of network studied, the results showed that the higher was the average VTT, the higher was the optimal price; and the higher was the dispersion (variance) of this VTT, the lower was the optimal price.

Text Manuscript_Accepted-ao - Accepted Manuscript
Download (594kB)

More information

Accepted/In Press date: 21 August 2017
e-pub ahead of print date: 3 January 2018

Identifiers

Local EPrints ID: 413526
URI: https://eprints.soton.ac.uk/id/eprint/413526
ISSN: 1076-0342
PURE UUID: 8098200f-50f7-4d9b-9101-4ba373ad4cdf
ORCID for Alejandro Ortega: ORCID iD orcid.org/0000-0002-5224-5363

Catalogue record

Date deposited: 25 Aug 2017 16:31
Last modified: 06 Jun 2018 12:21

Export record

Altmetrics

Contributors

Author: Jose Manuel Vassallo
Author: Juan Perez-Diaz

University divisions

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of https://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×