ECONOMICS OF TOLL ROADS

1
ECONOMICS OF TOLL ROADS

• Robert Sarmiento
• PA 710

2
Congestion

• Rising population in metropolitan areas.
• Caused by urban sprawl.
• More vehicles on freeways.

3
Congestion

• Freeway construction hasnt matched pace of
  increased number of vehicles.
• Accidents.
• Loss of time and money.
• Negative impact on environment.

4
Alternatives

• Carpooling
• Public Transportation
• Telecommuting

5
Toll Roads

• Pay fee to use highway.
• Usually parallel or near other freeways.
• Some toll roads have flat rate, while others use
  congestion pricing.

6
Toll Roads

• Examples
• CA-91 in Orange County, CA
• I-394 in Minneapolis, MN
• Meishin Expressway from Nagoya to Kobe, Japan

7
Economics of Toll Roads

• Freeways congested because anyone can use them.
• Only cost is time and space.
• Demand is limited by amount of cars using freeway.

8
Economics of Toll Roads

• Toll Pricing reduces demand.
• Gives people choice of whether to pay for a
  highway with a constant flow, or drive for free
  on congested highway.
• Encourages people to look for alternatives to
  travel.

9
Economics of Toll Roads

• Congestion pricing
• Toll road use fluctuates, so toll fee fluctuates.
• Toll roads pay for construction and operating
  costs.

10
Other Benefits

• Get vehicles moving in a more smooth and
  predictable manner.
• Internalizes costs.
• Revenue can pay for future toll roads.
• Outside budget constraints of government.

11
Costs

• Expensive fees
• Regressive (favors the rich)
• May impede development.

12
Conclusion

• More toll roads being built.
• Increased support for toll roads.
• In the future, a network of toll roads alongside
  freeways.