Who Benefits from Variable-Priced Road Tolls?

The Oregon Department of Transportation is planning to toll all lanes of major freeway in the Portland area soon. The San Francisco Bay Area Metropolitan Transportation Commission is considering tolling all freeways in the region later this decade. Plans such as these always raise charges that they will heavily impact low-income drivers.

An electronic tollgate that collects tolls without slowing traffic. Photo by OnionBulb.

In response, the Antiplanner has argued that low-income people will greatly benefit from variable-priced tolling. While many taxes, including gas taxes, are regressive, tolling is not because people pay for only what they use. Congestion, however, is regressive because low-income people are less likely to be able to work at home or on flexible schedules that allow them to avoid rush hour. “If variable user fees can relieve that congestion, working-class people will be among the greatest beneficiaries.”

Last week, researchers at Stanford University published a paper analyzing tolling on I-405 in the Seattle area and reached similar conclusions. “Relative to a world in which the same number of highway lanes are all free, status-quo tolling increases aggregate welfare and benefits drivers in all income quartiles,” says the paper. “Moreover, we find that drivers in the bottom income quartile gain the most under status-quo tolling.” Travelers benefit because the value of the time they save is greater than the tolls they have to pay and low-income travelers benefit the most, at least in this case, because they tend to have the longest commutes on I-405.

The paper was written by economists Cody Cook and Pearl Li. The two have also written a paper asking whether affordable housing projects should be built in low-income or middle-class neighborhoods. On one hand, it usually costs less to build in low-income neighborhoods because land is cheaper. On the other hand, building in middle-class neighborhoods gives low-income residents access to better schools and promotes racial integration.

What tips the balance, Cook and Li found, is that people who are only willing to apply to live in middle-class neighborhoods crowd out those who are willing to live anywhere. Since the former tend to be white, building in middle-class neighborhoods does not promote integration and may actually harm low-income minorities, both because less housing is built (due to the higher cost of building in more expensive neighborhoods) and because they face more competition for getting into affordable housing.

“This ‘crowding out’ effect occurs because of the limited supply of affordable housing units,” says the paper. “In contrast, other in-kind transfers such as food stamps and Medicare are entitlements; take-up by one household does not directly affect another household’s ability to take up assistance.” This is one more reason why affordable housing programs should be replaced by housing vouchers.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

2 Responses to Who Benefits from Variable-Priced Road Tolls?

  1. LazyReader says:

    Nobody.
    Because we already paid for our highways Once, how is charging additional fees beneficial?

    Like I said before; The problem with the highways isn’t the highways, it’s the exits/entrances that allow more vehicles to pour onto it. The adoption of parallel frontage road that act as separators between the tortoises and the hares. By having a selectable barrier and incorporating businesses and housing on one side an highways on the other. ESPECIALLY if you never have to get on the highway in the first place.

    Be it 4 lanes or 40, those lanes end at a choke point a filter. Cities are geographically limited to how many vehicles fit on city streets. Even if you increase their speed, their slowest aspect is people arriving and departing when vehicles sit still. Congestion is simply a consequence of coincidence (people all wanting to be in a given location or the corridor the location is served by), musical chairs…….That’s BASIC PHYSICS, Two objects cannot occupy the same space.

    The Fact is NO, new roads don’t boost the economy. Nor will adding additional fees or tolls be practical. High speed toll roads seem but the people willing to pay may speed past traffic, in turn more vehicles moved freeing up freeway space. But that’s inconsequential, since the size US automobiles namely SUV’s and trucks people don’t need, HIghway capcities are being reduced because these vehicles have larger breaking distances and more prone to rollover crashes so they cant veer out of the way of incident suddenly. Because eventually you have a point of diminishing returns….As such what’s happening now. Adding 10,000 lane miles of new highway adds ten thousand lane miles of maintenance. In industry and economy; infrastructure costs curb revenue/profitability so their aim is to have as little infrastructure as possible. LESS they need it…..

    Stop complaining about traffic, YOU ARE THE TRAFFIC.

    Cities could alleviate (Not eliminate) it’s traffic problems by
    – charging single occupancy driver congestion fees during on bridges and tunnels; Particularly during Rush Hour and use the money to repair their crumbling bridges and tunnels, many thousands are still structurally deficient.
    – Improve traffic signal coordination to move more vehicles per hour.
    – Deregulate the transit industry and allow people to use their cars to move people outside the scope of taxis, especially vanpools and shuttles.
    – offer tax incentives for residents who use their cars to shuttle people who need specialized transportation needs.
    – Let private engineering firms build their own tunnels and toll lanes and charge people the right to use them.
    – Encourage urban cycling, While the infrastructure cost of Bike lane, just to coddle 1,000 cyclers may seem inconsequential; remember 1000 cyclists; means 1,000 fewer cars

  2. Henry Porter says:

    Here’s my solution to equalizing transportation benefits for poor people. Take all the bazillions of dollars we’re now squandering on transit boondoggles and give it to some federal welfare agency to distribute to state welfare agencies, then to local welfare agencies.

    Give poor people transportation coupons, in proportion to their need, that they can use any way they want. Then let various modes compete for their business.

    I’ve always wondered, if you were to divide the annual amount of money doled out to transit by the number of poor people, how much would each one get?

    According to the CBO, the US spent $79 billion on transit in 2019. According to the census bureau, 37.9 million people lived below the poverty level in 2022. Disregarding that the data are from different years for a moment, that’s an average of over $2,000 per year per poor person. Imagine if you added the money states and cities spent on transit!

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