Revenue choice on a serial network

David M Levinson

Research output: Contribution to journalArticlepeer-review

20 Scopus citations

Abstract

A model to examine the choice by jurisdiction whether to finance roads with taxes or tolls is developed. The idea of decentralised, local control and multiple jurisdictions distinguishes this analysis from one where a central authority maximises global welfare. Key factors posited to explain the choice include the length of trips using the roads, the size of the governing jurisdiction, the elasticity of demand to revenue instruments, and the transaction costs of collection. These factors dictate the size and scope of the free rider problem associated with financing. Spatial complexity in this problem ensues because jurisdiction residents use both local and non-local networks, and each jurisdiction's network is used by both local and non-local residents. The central thesis argues that, since jurisdictions try to do well by their residents who are both voters and travellers, the effects of a revenue instrument on local residents is a key consideration in the choice of that revenue instrument. Decentralisation of control and lower toll collection costs are identified as conditions under which tolls would be more likely to become the preferred revenue instrument for highways.

Original languageEnglish (US)
Pages (from-to)69-98
Number of pages30
JournalJournal of Transport Economics and Policy
Volume34
Issue number1
StatePublished - Jan 1 2000

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