Demand will be elastic as far as the suburbs’ ability to redevelop into autonomous urban centers that attract traffic in balance with the amount they send out. In American cities we still have this idea of a “central business district”, that all the business should be done in the middle of the area and the homes should be on the outskirts. In Europe it’s the other way around, new businesses are built in the suburbs while the center is valued for its residential amenities.

That may be why there are more toll highways in Europe.

Once I pushed the “Add comment” button all previous 11 comments were instantly visible. So I suppose it was a problem with NYU’s computers?

Hi, Adam!

Last night and tonight I checked this thread from a number of different computers at NYU’s library (using a few different PCs and Macs). These are different from the computer I submitted three comments from on Thursday afternoon (a PC). On the NYU computers none of the comments (including three of mine, three [?] of yours, and one from a third party) are visible — although they were eventually visible, after about a half hour or so, on the PC that I used on Thursday afternoon.

Otherwise your blog site seems as usual (although the list of recent commentors on the right side of the page also does not reflect any of the recent comments, which I suppose is to be expected).

I’m sending this comment (Fri., 4/24/09, 8:04 p.m.) from an NYU computer (PC) to see what happens.

Thanks for calling me out on that. (Chris is apropriately skeptical, too) I guess it was a stretch for me to brush aside elasticity, and expect people to believe me without showing why the effects are not very consequential to critical flow, except under conditions of extreme elasticity. I was hoping to avoid that highly complex aspect, but I’m up to the challenge of addressing it.

As you correctly state, the assumption also presumes some rationality in the design of the current monopolistic network.

So, I will address the elasticity issue in the next few days before moving forward on this topic…

How can you be so sure of an elastic demand? For (an exaggerated)example, let’s say that a toll is $10 and the veh/hr = 1500. Now, suppose that the toll is raised to $50 and the new veh/hr is 1000.

Old revenue = $10 x 1500 = $15,000
New revenue = $50 x 1000 = $50,000

Revenue way up, flow way down.

Of course, I am simplifying — and ignoring the difference between short- and long-term elasticities, competition, and the ability to build new highways.

In a highway market that is not controlled by a monopoly government and with land regulations that prohibit double-decking (and triple-decking?) highways, I would be much more inclined to agree with your theory.

Incidentally, even a monopoly government would try price discrimination to *deliberately* restrict flow to increase revenue. Airlines do it all the time by pulling out pulling out seats in the front of the plane and calling it “first class”. Similarly, railroads (and the Paris Metro at one time) have premium service. In Paris, the first-class cars were identical to the other cars, except they cost more to ride in — hence, they were emptier.

Maybe a private highway operator would have flow-reduced lanes for a premium price — assuming people would be willing to pay much more to drive at 65 mph (or 100 mph?) than at flow-maximzing “coach” speeds of 45 mph…

Adam (the proprietor of Market Urbanism), I look forward to your more extended discussions of congestion pricing. But in the meantime, I thought I’d mention what I think are some bad and good examples of the congestion pricing concept as they relate to my idea of (market) urbanism. It seems to me that naturally occurring congestion pricing (as opposed to politically mandated congestion pricing) can actually happen pretty naturally — and that such “natural” congestion pricing (as opposed to self-conscious, politically achieved congestion pricing) is likely the most useful kind of congestion pricing as it relates to market urbanism. (It’s more a matter of removing government than a matter of imposing more government.)

EXAMPLE OF A BAD MANIFESTATION OF CONGESTION PRICING

Randall O’Toole’s (?) idea to create tolled “premium” (express) streets — like a tolled version of Grand Central Terminal’s “circumferential” roadway and its Murray Hill tunnel extension.

This, to me, is misguided manifestation of the congestion concept.

SOME EXAMPLES OF GOOD MANIFESTATIONs OF CONGESTION PRICING

– Market rate private parking garages (which, I assume, already exist — I’m a non-driver). (Although rates for parking on city streets should, I suppose, reflect the surrounding private rates, I don’t think a city should think of parking on city streets as a “profit center.” Making money from parking is not a true function of government, in my opinion, but an ancillary product.)

– Market rate bridge / tunnel / ferry tolls (especially if they were allowed to lead to the development of more bridges / tunnels / ferries).

I see modern day bridges, tunnels (e.g., like those accross the East and Hudson Rivers) as being essentially more “modern day” versions of the privately owned ferries that once operated on these “rivers” — and thus they are more like canals, railroads and turnpikes (toll roads on privately owned land) — i.e., supplemental “premium” modes of transportation, rather than like regular local city streets.

– Market rate AND relatively unregulated bus lines, taxis, etc. (It’s such a shame that NYC has actually gone in the opposite direction — taking over privately owned bus lines in Queens, etc.) By the way, I’m guessing, but I would think that market rate tolls for bridges / tunnels / ferries would be cheaper per person for buses (due to high carrying capacity) despite their weight (leading to more wear and tear).

– Higher fines for traffic violations in the CBD. I don’t drive, so I’m not sure about this, but I think the fines charged for various traffic parking violations are uniform city wide. It seems to me that they could be higher for the CBD as the problems created by such violations are greater (e.g., blocking the box) and they create greater expenses for cities (more police and traffic agent monitor intersections and enforce regulations). Higher fines, along with more regulations in the first place (due to higher congestion) and greater likelihood of motorists being fined are more natural forms (and more legitimate forms) of congestion pricing in my opinion.