C H A P T E R S I X T E E N Urban Passenger Travel Demand INTRODUCTION The idea of tolling roads to reduce traffic congestion was suggested back in 1920. For several decades, road pricing was largely dismissed as impractical and publicly unacceptable | A Companion to Urban Economics Edited by Richard J. Arnott Daniel P. McMillen Copyright 2006 by Blackwell Publishing Ltd I CHAPTER SIXTEEN Urban Passenger Travel Demand André de Palma Robin Lindsey and Nathalie Picard Introduction The idea of tolling roads to reduce traffic congestion was suggested back in 1920. For several decades road pricing was largely dismissed as impractical and publicly unacceptable and early attempts to introduce tolls on urban roads foundered because of poor marketing strategies and political opposition. But a number of road-pricing projects are now in operation or planned around the world and in the 1990s the US federal government introduced a Value Pricing program to fund innovative road and parking pricing schemes. This essay reviews two econometric studies of road pricing in the United States. One by Lam and Small 2001 concerns a toll-lanes project on State Route 91 in Orange County California which was the first Value Pricing project to be implemented. Lam and Small use data obtained from users of the freeway to estimate individual choice models of whether to drive on the toll lanes and related travel decisions. The second study by Bhat and Castelar 2002 investigates the effects of hypothetical congestion-pricing initiatives in the San Francisco Bay Area. Their study illustrates how traveler responses to policies that have yet to be implemented can be estimated. The two studies focus on the role of road pricing to alleviate traffic congestion which is a rising scourge in large urban areas. In part support for road pricing derives from the basic economic principle of efficient pricing that motorists should pay the full marginal costs of driving - including congestion air pollution and other external costs. Support for road pricing also stems from the fact that more traditional policies to improve personal mobility have not been particularly 262 A. de Palma R. Lindsey and N. Picard successful. One policy which was emphasized in the
