Thread by @torrHL

"Charging Drivers for Road Use Is Popular With Economists, Less So With Drivers -

Congestion fees represent ‘a triumph of economics,’ but implementing new pricing programs is harder"

wsj.com/articles/charg…

"If the programs are new, the economic rationale behind them is not.

As far back as 1920, British economist Arthur Pigou noted that each driver on a road imposes costs on other drivers.

Those costs are borne by all drivers in the form of traffic congestion."

"The better way, Mr. Pigou argued, is to charge each driver a toll for the burden he or she places on all the other drivers, which economists call “negative externalities.”

"The toll would have to be high enough that it would discourage many people from driving and hold down congestion.

The remaining drivers would then pay the real value of driving in free-flowing traffic."

"Economists say congestion charge programs need to be carefully administered to avoid harming lower-income commuters more than higher-income ones."

"In London, for instance, where lower-income households tend to not have cars, city officials ramped up bus service at the same time as the charge was imposed."

"In New York, revenue from the charge would go toward maintaining and expanding the transit system, but it’s unclear whether bus and subway service would expand when the charge is put in place."

"The situation becomes more difficult in places where everybody drives, rich and poor alike,” he said.

"New York is an easier test case for that than, let’s say, Houston.”

CC: @modassic @tminus5