Example Of Road Pricing

Road Pricing is the system whereby users pay a direct change for the use of the road network to different parts of the country. Examples of Road pricing are congestion, charging and the road user charging. However, economic principles that underpin road pricing are as follows:

i) Speed based charging

Price is directly proportional to the time the road is being used, if you will use the road for more than 7 hours, you will pay more money compared to those ones who will use the road for 4 hour. Vehicles pay according to how far they travel within a given area and this may be developed by relating the charge also to the speed of travel on the statement that slower speeds indicates more congested areas which would be more costly because external costs of congestion are high in congesting areas. ii) Distance

Pricing depends on the distance travelled and these charges will include the costs that will be caused by that certain transport to the society, such as Air pollution, noise pollution etc.

In this case those who will travel short distances will pay less depending on the cost they will cause to the community, and those who will travel long distances are expected to pay quite high price. iii) Type of transport being used

Road transports are charged differently depending on the effects it causes to the environment.

The inefficiency of charging all vehicles the same price varies with the amount to which the individual vehicle cost vary. One way of reducing this inefficiency is to classify the vehicle population i.e. (cars, motorcycles, taxis, Lorries of various sizes etc) and to charge each vehicle according to its class. Example taxis use the road every time compared to private cars.

The major economic motivation for introducing roa...

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...ed for different objectives, like congestion aid, revenue raising and environmental improvements. In case of revenue raising, the government will keep this fund from road pricing to help people who will be negatively affected by accidents caused by transports though some funds are intended to recover construction costs and this way environment is improved.

I concluded that charges should be closely related to the amount of the use made of roads. It should be possible to change prices to some extend for different roads or areas at different times of the day, month, and year as well as for different classes of vehicles should be stable and gladly ascertainable by road users before they get on with a journey. Finally, the method should be simple for road users to understand whereby payments should be possible and individual road users should take it fair.