Economic Development Research Group Blog

ROAD PRICING MAY BE COMING: ECONOMISTS ARE ON BOARD, BUT WILL THE PUBLIC BE CONVINCED?

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Most people seem to agree with a “user-pays” principle for transportation infrastructure, especially for roads and highways. The fuel excise tax on gasoline and diesel has long been the primary source of federal and state transportation revenues. While economists have long advocated for other types of fees, transportation professionals, policymakers, politicians and even the public have just recently become more active in pricing discussions. A number of trends in transportation technology and behavior have launched this discussion, which was strongly evident this year at the TRB Annual Meeting. A lot of work that I shared at TRB this year considers how revenue policies might respond to the following trends and what the impacts of those revenue policies would be on household contribution to transportation funding in urban and rural areas respectively. Trend 1: Fuel Efficiency and Electrification. The most recent CAFE standards will significantly increase the fuel efficiency of the fleet,...
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