How much is too much for tolled road users: toll saturation and the implications for car commuting value of travel time savings?

Abstract

The current practice of forecasting the demand for new tolled roads typically assumes that car users are prepared to pay a higher toll for a shorter journey, and they will keep doing so as long as the toll cost is not higher than their current value of travel time savings. Practice ignores the possibility that there could be a point when motorists stop driving on toll roads due to a toll budget constraint. The unconstrained toll budget assumption may be valid in networks where the addition of a new toll road does not result in a binding budget constraint that car users may have for using toll roads (although it could also be invoked for existing tolled routes through a reduction in use of a tolled route). In a road network like Sydney which offers a growing number of (linked) tolled roads, the binding budget constraint may be invoked, and hence including additional toll links might in turn reduce the car users’ willingness to pay for toll roads to save the same amount of travel time. When this occurs, car users are said to reach a toll saturation point (or threshold) and begin to consider avoiding one or more toll roads. Whilst toll saturation has important implications for demand forecasting and planning of toll roads, this type of behaviour has not been explored in the literature. We investigate the influence that increasing toll outlays has on preferences of car commuters to use one or more tolled roads as the number of tolled roads increases. The Sydney metropolitan area offers a unique laboratory to test this phenomenon, with nine tolled roads currently in place and another five in planning. The evidence supports the hypothesis that the value of travel time savings decreases as a consequence of toll saturation.