Determining Highway Toll: Revenue Maximization Approach

Abstract

Constructions and operations of toll roads under private and public partnerships (PPP) have been quite successful as the partnerships have added more roadways and provided faster travel time for those who are willing to pay for additional fee. So far, toll rates have been determined on the basis of marginal social cost pricing concept, recovering construction and maintenance costs within a reasonable duration, or political determination. Under the PPP, the private partners would like to achieve maximum revenue on their toll roads. This paper presents a flexible and real-time toll rate determination method that is focused on revenue maximization approach via a case study.