3. Generalised cost
• In transport economics, the generalised cost is the sum of the monetary
and non-monetary costs of a journey.
• Monetary (or "out-of-pocket") costs might include a fare on a public
transport journey, or the costs of fuel, wear and tear and any parking
charge, toll or congestion charge on a car journey.
• Non-monetary costs refer to the time spent undertaking the journey.
Time is converted to a money value using a value of time figure, which
usually varies according to the traveller's income and the purpose of
the trip.
4. Weighting different types of time
It has been observed that travellers prefer time spent on some parts of
their journey over time spent on others. A typical journey can be divided
into four parts:
• Walk from the origin
• Wait for the vehicle
• Ride in the vehicle
• Walk to the destination
5. • Typically, although travellers "dislike" all time spent travelling, they
dislike walking and waiting parts of the journey more than in-vehicle
journey time, and thus would be willing to pay more to avoid them.
• This results in a higher value of time for those parts of the journey
than the main in-vehicle part of the journey. The function u(w)
mentioned earlier can therefore be considered to consist of differing
sets of valued time.
• For example, if a traveller considers 10 minutes' walk to be "as bad" as
12 minutes in a vehicle, then each minute of walking time is equivalent
to 1.2 minutes of in-vehicle time. In this manner, all parts of the
journey can be converted into their equivalent in-vehicle time.
6. Generalized Time
• If the monetary cost of the journey (p) is considered to be irrelevant for
the purposes of the exercise (for example, when comparing different
journey options through a public transport network when fares are
constant), there is no need to convert the generalised cost to a currency
value - instead, it can be left in units of time, as long as all time is
equivalent (for example, if all time is converted to in-vehicle time).
• These units of time may be referred to as generalised time.
7. Pricing principles
• Roadway congestion, air pollution from cars, and the lack of resources
to finance new surface transportation options present challenges. Road
pricing, charging users a monetary toll in addition to the amount of
time spent traveling, has been suggested as a solution to these
problems.
• In short pricing can accomplish several objectives
• Revenue
• Congestion management
8. Theory of Congestion Pricing
Whenever a scarce and valued good such as road use is free or under priced,
demand will outstrip supply. An illustration pertaining to road use is evident by the
queues and traffic jams that occur when the number of motorists attempting to
use a section of roadway at the same time exceeds the road’s capacity. Expanding
capacity to meet peak demand results in wasteful excess capacity during non-peak
periods unless the peak users are charged the full cost of the expansion. If we look
at long-distance telephone service, allocation is determined with a market
mechanism by charging a premium for a call during peak periods and by offering a
discount during off peak periods
9. Decisions made by road users about where and when to use their vehicles are
made by comparing the benefits they will receive from using the road with the
costs to themselves. These costs do not include the costs they impose on other
travelers or on society as a whole, such as congestion and environmental damage.
The results from this type of behavior are trips being made in which benefits to the
motorist are less than the costs to society. There is more traffic than can be
justified and is not efficiently located in time and capacity. If people are charged for
the costs they impose on others because of their travel decisions, then that pattern
of travel which results in optimal efficiently will occur.
10. Alternative Revenue Mechanisms
Road user charging may be more or less direct. Generally, indirect methods
of road charges are related to vehicle ownership and usage. Examples would
be fixed charges for owning a car -purchase tax for buying a new vehicle and
annual licensing renewals- and variable charges on car usage -taxes on tires
oil and fuel.
Indirect methods of road charging, such as fuel taxes, are the most
commonly used in today’s society because of the high volume of usage and
ease of collection. However, revenue methods like fuel taxes rarely channel
funds directly into a road or transportation fund that is specifically for
highway maintenance or development. Where there is congestion caused by
multiple road users, drivers impose a marginal social cost in terms of delay
and higher operating costs on other uses, for which they are not being
charged.
11. Direct charging involves monitoring the actual time or distance of vehicle travel
and charging appropriately. There are many ways in which to carry out direct
charging. With the development of electronic technology, both off-vehicle and now
in-vehicle charging mechanisms can be implemented. Off-vehicle mechanisms are
devices like manual toll collection booths, coin operated machines, and road side
auto-scanners. In-vehicle mechanisms are magnetic cards, smart cards, and
transponders.
Congestion pricing could take several forms. The most straightforward example
would be to add an extra fee to an existing toll, or to add a peak fee on an untolled
route or bridge. The charge could be a simple peak premium price or off-peak
discount received, or the charge could vary according to the demand imposed on a
facility at a specific time.
12. In practice, congestion pricing could take six forms:
Point pricing, In which a highway user passing a point at a specific time is charged a
fee for passing that point regardless of the distance travelled on a specified route;
Cordon pricing, in which users wishing to enter a congested area are charged fees
at each entry point;
Zone pricing, in which users traveling within a cordoned area also pay a fee;
Higher charges for parking in congested areas, with particular emphasis on parking
during the most congested period;
Congestion-specific charges, in which users would be charged for both the amount
of time spent and distance traveled.
13. Effects of Congestion Pricing
There are many possible changes in travel choice, including:
Route, changing from tolled to un-tolled routes or to faster tolled routes.
Time, changing to earlier or later departures to avoid tolls or tolled periods.
Mode, changing to or away from carpools, transit, or other modes.
Destination, changing to a closer location for non-work activities.
Location, moving home or workplace to reduce the commute.
Sequence, linking trips by combining multiple errands on a single trip.
Frequency, reducing the number of less important trips
Presence, conducting activities by telecommuting to decrease work related trips.
Ownership, Motorists may also forgo ownership of automobiles to bypass toll charges.
