A theoretic analysis of expressed toll lane pricing policy targeting for a guaranteed level of service

Abstract

This study compares the first-best toll algorithm that is theoretically appealing with the density-based toll algorithm that is more popular in practice. The comparison shows that both toll schemes can serve as a travel demand management strategy. Although the first-best scheme always leads to minimal total travel time, it is not necessarily attractive from toll operators' perspective. The density-based scheme is (1) more reliable for ensuring the federally mandated minimal level of services when the demand is high, (2) simpler for data collection and implementation, and (3) can generate higher revenues. From the users' perspective, the first-best scheme leads to less total costs in many cases, but the density-based scheme could also lead to less total costs under certain conditions. Traffic patterns could converge in both cases under a day-to-day framework. The speed of convergence for traffic dynamics is faster under the density-based scheme in most cases.