Kenneth A. Small

Driven by problems of traffic congestion, U.S. policy toward urban highways has lurched over several decades from highway building to high-occupancy-vehicle lanes to travel demand management. Yet congestion has worsened, and there is scant evidence that these policies have had any appreciable effect on it. As financial straits tighten, policy analysts are looking for new solutions. Meanwhile, economists have been polishing up a long-standing proposal known as congestion pricing. Under this policy, drivers would have to pay a very high fee for driving on the most popular roads during peak hours. We already expect to pay top price for long-distance phone calls during business hours, and many of us wait for discounts at night. But can the same concept work for highways?

Download the PDF.