Eric Morris: Why You’ll Love Paying for Roads That You Don’t Pay for Now

Lynne Kiesling

Eric Morris, guest-blogging at Freakonomics, has two guest posts (one) and (two) on road congestion pricing. Congestion pricing is a much-discussed topic here at KP, and the two Morris posts are excellent discussions of the benefits of congestion pricing. In his first post he explains how variable tolling can generate the optimal level of congestion:

To make tolling truly effective, the price must be right. Too high a price drives away too many cars and the road does not function at its capacity. Too low a price and congestion isn’t licked.

The best solution is to vary the tolls in real time based on an analysis of current traffic conditions. Pilot toll projects on roads (like the I-394 in Minnesota and the I-15 in Southern California) use sensors embedded in the pavement to monitor the number and speeds of vehicles on the facility.

A simple computer program then determines the number of cars that should be allowed in. The computer then calculates the level of toll that will attract that number of cars — and no more. Prices are then updated every few minutes on electronic message signs. Hi-tech transponders and antenna arrays make waiting at toll booths a thing of the past.

How cool is this? In his second post he’s a little Pollyanna-ish when he says

But is this a bad thing? Our transportation system is in trouble and tolls are a fair way of raising the revenue to maintain it. Shouldn’t users of the transportation system bear the burden of its upkeep?

Even better, paying government to use the roads would get us something for nothing. When you pay a toll, the money is transferred from one party (you) to another (the government). Granted, it is annoying to be the one doing the paying, but at least the money goes to a (presumably) good cause, such as an improved transportation system.

But when you sit stuck in traffic, your time is wasted and no one is benefiting. Better to transfer money from one pocket to another than to let all that time go up in smoke.

But his point is correct that a good congestion pricing system that generates revenue and leads to efficient outcomes is better than the current system.