UC Irvine Institute of Transportation Studies

The purpose of this paper is to estimate the welfare effects of instituting nationwide marginal cost pricing for heavy highway vehicles, with marginal costs defined as the incremental contribution of a vehicle to repaving costs. We first describe such a tax, using existing evidence on the marginal costs of various vehicle movements. Next; we outline a procedure for estimating the tax's impact on the distribution of vehicle-miles traveled by different types·of heavy trucks, and on shippers' modal choice between truck and other forms of freight transportation. We then show how to calculate net benefits and the distribution of costs and benefits among shippers, carriers, and the public treasury. These calculations are carried out using 1982 data. Despite an atteMpt to be conservative throughout. we find that such a tax could go a long way toward solving the physical and financial problems of maintaining a sound infrastructure.