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Open Access Publications from the University of California

An Economic Analysis Of Network Deployment And Application To Road Pricing

  • Author(s): Levinson, David
  • et al.

This paper develops an economic framework for developing strategies necessary to deploy networks, and applies the framework to the deployment of road pricing. The cost structure of highways are discussed. A graphical method for measuring welfare with road pricing is presented. The relationship of space and financing mechanism is reviewed. A network model of the economy is presented. This is followed by a discussion of network externalities, and how those relate to both the deployment and emergence of technologies. Finally, the deployment of three main elements relating to road pricing: use of electronic toll collection on existing toll roads, construction of new toll roads, and conversion of existing untolled road to toll roads are discussed. Key Words: Road Pricing - Deployment, Congestion Pricing, Toll Roads, Turnpikes, Network Financing

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