Inframarginal Travelers and Transportation Policy

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Date
2024-08-06
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Wiley
Abstract

Structural models of traffic congestion, such as the bottleneck model, are used to answer important, policy-relevant questions. However, existing models typically assume that no travelers are inframarginal regarding when to travel; that is, given equilibrium travel times, no travelers strictly prefer their ex-ante departure time to all others. In this paper, I address this shortcoming by incorporating inframarginal travelers into these models. This change significantly improves these models’ ability to fit the data and changes policy prescriptions. In the case of congestion pricing, it typically changes the optimal toll by at least 25% and significantly worsens the distributional impacts.

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Citation
Hall, Jonathan D. (2024) ``Inframarginal Travelers and Transportation Policy,'' International Economic Review, Vol 65, No. 3, pp. 1519--1550.