Effects of road pricing – some suggestions based upon experience from urban areas like Stockholm

Abstract

In this paper, we list the experiences of road congestion regulation using a road price system in Stockholm, Sweden. We add findings of a quantitative regulation system in Oslo, Norway when the road authorities closed tunnels towards the center June 1, 2015. We add findings in Oslo and Stockholm where politicians designed a policy to improve road use organization. We add an analysis by a Danish economist Jens Warming in 1911. He designed a model to regulate exploitation of exhaustible fish resources and showed that regulation policy reduces exploitation and secures the available stock of these resources2. Warming introduced what he defined as a social revenue correction of private revenue that agents based their market behavior on. Unregulated market behavior with free accessible and exhaustible resources can drain such resources. We define an urban road transport networks that will have similar exhaustible characteristics. Introducing road price changes road users' behavior, thus such a regulation systems can optimize road use utilization, free urban area for different purposes and solve the problems of the commons. We present Braess' paradox and discuss a consumer choice dilemma in choosing transportation in morning rush hours.