Road Work: A New Highway Pricing and Investment Policy

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Brookings Institution Press, Jan 1, 2012 - Political Science - 140 pages
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America's interstate highway system is deteriorating, and traffic congestion in most urban centers is worsening. Because of the many strong and conflicting interests, policy discussions about the road system are also in gridlock. The only consensus that seems to have emerged is that public spending must be increased.

Improving our highway system and its financing will not be easy. Road Work proposes a comprehensive highway pricing and investment policy to meet the goals of efficiency, equity, and financial stability.

In this study, Kenneth A. Small, Clifford Winston, and Carol A. Evans base their policy on two economic principles: efficient pricing to regulate demand for highway services and efficient investment to minimize the total public and private costs of providing them. Policy recommendations include a set of pavement-wear taxes for heavy trucks, a set of congestion taxes for all vehicles, and a program of optimal investments in road durability. Their proposals should be especially attractive to policymakers because they can be implemented with current technology, offer little threat to the major interest group, and in the long run will reduce the strain on state and local governments' highway budgets.

 

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Contents

Introduction
1
Historical Overview
3
Highway Interests
5
Making Policy for the Future
7
Road Pricing and Investment
9
MarginalCost User Charges
10
Optimal Investment
13
Formulas for RoadWear Costs
14
Weight Limits
75
Conclusion
78
Congestion and Highway Capacity
80
Why the Experts Have Given Up
84
Economic Utopia Political Dystopia
86
A Revisionist View of Congestion Pricing
88
The Impact of Congestion Pricing
93
Conclusion
98

Pavement Technology
18
Conclusion
21
Appendix
22
Pavement Wear and Road Durability
37
Demand Component
44
Findings
52
Sensitivity of Findings
60
Conclusion
62
Simplifying Policy Administration
69
Simple Pricing Rules
71
Simple Investment Rules
74
Effects on Highway Finance
99
Returns to Scale and Budget Balance
100
A Model of Multiproduct Returns to Scale
102
Results
106
Conclusion
112
A New Highway Policy
114
Congestion Charges and Investment in Capacity
118
Managing the Transition
120
Conclusion
122
Index
125
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About the author (2012)

Kenneth A. Small is professor of economics at the University of California, Irvine.

Clifford Winston is a senior fellow in Economic Studies at the Brookings Institution. Among his previous books are Deregulation of Network Indus

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