Socio-economic Assessment of Road Pricing Systems ? Results from Two Projects in the Copenhagen Region

Socio-economic Assessment of Road Pricing Systems ? Results from Two Projects in the Copenhagen Region


Jeppe Rich, Otto Anker Nielsen, Danish Technical University, DK; U Nielsen, The Danish Environmental Assessment Institute, DK


The paper introduces a paradigmatic approach for how to evaluate and benchmark different road pricing systems. A key issue in that respect is how to disentangle and valuate all the possible traffic related effects.


In recent years road-pricing has been implemented in a number of European cities including Rome, London, Oslo, and Stockholm. Copenhagen could be on the verge of introducing road-pricing and two projects have been carried out recently in order to screen and benchmark the performance of different types of road pricing systems in the Copenhagen region. The first project, referred to as the KK project, provides a first screening of twelve different road pricing systems. The twelve projects ranged from highly advanced GPS systems covering most of the city area to small cordon based systems mainly focusing on the central parts of the city. The second project, the IMV project, provides an in-depth analysis of four projects that passed through the initial screening phase.

The main contribution of the paper will be to outline a paradigmatic approach for how to ? in an economically consistent way - evaluate and benchmark different road pricing systems. A key issue in that respect is how to disentangle and valuate all possible traffic related effects that result from a given road pricing system. Possible effects include reduced trips, departure time, mode choice, destination choice, and route choice. Traffic models typically calculate these in a sequential or simultaneous demand model combined with a following assignment model. When congestion accumulates in the network, a feed-back mechanism ensures convergence of the model system by applying an iterative approach. This, however, makes it difficult to trace and decompose the changes in traffic into specific categories, as the outcome of the model is only before and after matrices.

The aim of the analysis of performance of different projects is to be able to range the various projects on the basis of their overall net utility from the point of view of the society. The paper will thus present and discuss the overall socio-economic effects of introducing road-pricing in Copenhagen. The analysis will include the changes in congestion, road pricing revenue, time savings, pollution, noise and accidents as well as the economic costs of establishing and maintaining the road-pricing scheme. The assessment requires that all effects are disentangled and it should distinct between direct effects and indirect effects because their benefit (negative or positive) is valuated differently in the economic assessment. For instance, trips that are completely cancelled should be handled differently from trips that represent modal shifts; an unaltered trip has reduced time use as a benefit, while a cancelled trip is a disbenefit despite the fact that time is saved. The latter is due to the fact that executed trips provide a user surplus (since they were not made otherwise), and imposing road pricing results in a disbenefit for the users that have to cancel trips, and a time-benefit for those who choose to pay and hereby save time compared to the situation before the introduction of road pricing.

The process, by which effects can be decomposed into the various valuation categories for trips, tends to be relatively complex and to our knowledge the problem remains to be described in the literature. A core contribution of the paper is to present this methodology.

Beyond outlining a framework for socio-economic evaluation of road pricing systems, we will present some of the additional accumulated knowledge and experience gathered in the projects. This includes a description of the initial selection process, by which eight systems were left out on the basis of an initial screening. We also debate the issue of recycling, e.g. in which way the revenue from road pricing should be canalised back to society. This issue has become increasingly relevant because the public acceptance of road pricing is closely related to the issue of recycling. More specifically, we debate a number of potential infrastructure projects for Copenhagen as objects for benefit recycling and we make a financial assessment of the performance of two new infrastructure investment strategies in two separate recycling scenarios.


Association for European Transport