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Congestion Pricing and Maximizing Freeway Throughput

Transportation experts have demonstrated that congestion pricing can maximize highway throughput. Throughput is defined as the number of cars that cross a certain point on a freeway over a given amount of time. Cost-effectively maximizing throughput is obviously an important objective, and congestion pricing can achieve this objective by controlling average vehicle speed during rush hour.

Intuitively, two factors impact a freeway’s throughput: the average speed of the vehicles on the freeway and the number of vehicles on the freeway. Inevitably, these two factors work against each other. As more vehicles enter the freeway, the average speed of vehicles decreases.

Studies have shown that freeway throughput is maximized when the number vehicles on the freeway allows vehicles to travel at about 50 mph. In other words, if vehicles are traveling at 70 mph, then throughput is not maximized because the increased average speed is offset by the low volume of vehicles. On the other hand, if vehicles are traveling at 20 mph, then the high volume of vehicles is offset by the low average velocity.

By charging commuters to use roads during periods of congestion, the number of vehicles on the freeway is optimized to maximize throughput. As average speeds decline, the price to enter the freeway increases to ensure that vehicle speeds hover around 50 mph.

Chao Chen and Pravin Varaiya have demonstrated the relationship between average vehicle speed and freeway throughput. Click here to see the chart.

In 2005, the US Department of Transportation issued Report on the Value Pricing Pilot Program Through March 2004. According to the report, a lane with congestion pricing on State Route 91 in Orange County, California carries twice as many vehicles per lane during rush hour than the adjacent toll-free lanes.

Benefits to taxpayers
Congestion pricing offers several benefits to taxpayers. First, congestion pricing slows the growth in vehicle miles traveled (VMT) by incentivizing commuters to carpool, telecommute, use roads during off-peak hours, and live closer to work. Slowing the growth in VMT means state and local governments can slow the growth in transportation expenditures.

Congestion pricing also improves the utilization of freeways and does this in two different ways. First, congestion pricing encourages drivers, especially discretionary non-commuting drivers, to use roads during off-peak hours when roads are under utilized. Second, as explained above, congestion pricing maximizes freeway throughput by optimizing average vehicle speeds.