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The Economics of Public Issues - Heavenly Highway Outline

The Economics of Public Issues - Heavenly Highway Outline -...

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Heavenly Highway When one is in a traffic jam, the price of the scarce good of highway travel is zero in terms of money but time is the cost. When utilizing highway travel there are the personal costs of the driver such as fuel price, wear and tear of car, etc. but when congestion occurs every driver uses the time of other drivers as a congestion cost. Congestion suggests that if all roads were tolled drivers might be better off overall because it is a means of control of how many cars are on the road at one time. There have been less tolls in the past because the costs outweigh the benefits with building of toll booths and having employees work 24hr/day but new electronic tollbooth systems such as ezpass have eliminated many costs of tolls. Some cities have high occupancy toll (HOT) lanes for high-occupancy vehicles (HOVs): free or cheap for full cars, where a single person trying
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Unformatted text preview: to get through fast in a HOT lane would have to pay a fee depending on the time. • Adverse affects of tolls can be exemplified in Singapore where they tolled the main roads which cleared them up during rush hour but caused major congestion on “backroads”. • London – charges a toll and fines if the toll doesent pay, seemed to get the price right so it worked. • Hong, Kong, China- serious congestion problems, people who drive want all people’s taxes to pay for new roads, people who don’t drive want tolls to get drivers to pay for the problem. • Japan has incredibly high tolls, causes people to go to extreme measures such as purchasing plane tickets for a destination 200 miles away rather than drive. • Conclusion: its hard to price highways correctly....
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