Congestion pricing The basic observation The congestion costs due to any specific user have 2 components: (1)Cost of delay to that user(internal cost) (2) Cost of delay to all other users caused by that user (external cost) At congested airports(and congested facilities, in general) this second component can be very large A congestion toll can be imposed to force users to experience this cost component (to internalize the external costs
Congestion pricing: The basic observation • The congestion costs due to any specific user have 2 components: (1) Cost of delay to that user (internal cost) (2) Cost of delay to all other users caused by that user (external cost) • At congested airports (and congested facilities, in general) this second component can be very large • A congestion toll can be imposed to force users to experience this cost component (to “internalize the external costs”)
Economic principle Optimal use of a transportation facility cannot be achieved unless each additional (marginal) user pays for all the additional costs that this user imposes on all other users and on the facility itself. A congestion toll not only contributes to maximizing social economic welfare, but is also necessary to reach such a result. (Vickrey, 1967, 1969; Carlin+ Park, 1970)
Economic principle Optimal use of a transportation facility cannot be achieved unless each additional (marginal) user pays for all the additional costs that this user imposes on all other users and on the facility itself. A congestion toll not only contributes to maximizing social economic welfare, but is also necessary to reach such a result. (Vickrey, 1967, 1969; Carlin + Park, 1970)