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Open Access Publications from the University of California

Road Pricing for Congestion Management: The Transition from Theory to Policy


Traffic congestion is a classic externality, especially pervasive in urban areas. The theoretical and empirical relationships governing it have been thoroughly studied. As a result, most urban economists and a growing number of other policy analysts agree that the best policy to deal with it would be some form of congestion pricing. Such a policy involves charging a substantial fee for operating a motor vehicle at times and places where there is insufficient road capacity to easily accommodate demand. The intention is to alter people’s travel behavior enough to reduce congestion.

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