Improved Framework and Tools for Highway Pricing

Dr. Mahmassani served as PI for Northwestern University Transportation Center’s participation through a subcontract to PB Americas, Inc., contracted by the National Academy of Science to implement a research synthesis on “Improved Framework and Tools for Highway Pricing”.

The current state of U.S. practice for highway pricing decisions is characterized by the following tendencies:

• Incorporation of road pricing in the general framework of regional travel demand models and planning processes by state DOTs and MPOs. These include 4‐step models based on static assignment procedures as well as recent practical implementations of activity‐based models and dynamic traffic assignment.
• Financial analyses by consultants hired for bond‐rating agencies, resulting in revenue and demand projections often based on simplified modeling tools, such as corridor‐level traffic assignment using aggregate demand elasticities.

Public agencies seek to improve the overall performance of regional transportation networks, so their interest in toll road profitability may be bounded by opportunities for re-investing net revenues in further system enhancements and/or pursuing other welfare-enhancing policies for their community of travelers, including both transit and highways users. In order to adequately reflect the number of potential behavioral shifts (for example, destination and time-of-day choice) and policy strategies that may apply under significant implementations of roadway pricing (for example, variable and/or occupancy-based tolls), travel models should be comprehensive. They should reflect regional networks and modes, times of day and traveler types. To permit robust evaluation of welfare impacts, they should be behaviorally founded. The ultimate purpose of these models is a description of travel behavior and demand response.

Understanding, planning, and managing road pricing as part of a regional system’s operation is a critical objective of this study.  NUTC’s role focused on the development of network-based methodologies to capture the short and long term term responses of users to different pricing schemes, as part of decision-support capabilities for public and private entities.