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Open Access Publications from the University of California

Which consumers benefit from congestion tolls?


Consider a consumer who can choose to travel on a congestible fast mode or on a congestible slow mode. Users who most value time will use the fast mode. A toll on the slow mode can induce some people who initially use that mode to switch to the fast mode. A toll on the slow mode with revenue not returned to users then necessarily reduces the welfare of all users. A toll on the fast mode may raise aggregate consumer surplus.  

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