2016 Volume 39 Issue 2 Pages 49-55
This paper examines the effects of changes in toll systems on economic efficiency, focusing on the case of the Tokyo Metropolitan Expressway (called Shutoko in Japanese), whose toll system was shifted from a flat toll to a distance-based toll. The surplus analysis showed that the shift could increase social surplus. Before the shift, the Shutoko network consisted of three toll zones, and drivers used to have to pay a flat toll within each zone. In addition, drivers who passed through two or more toll zones had to pay for each zone. In other words, the highway company received a toll for each toll zone. After the shift, the toll was determined in accordance with distance traveled. As a result, a reduction of total tolls per trip caused an increase in the number of cross-border drivers. An increase in their surplus outweighed a decrease in the surplus from drivers within a single toll zone, which resulted in an increase in the total social surplus. In addition, it is shown that applying the Ramsey pricing rule, based on one's price elasticity of demand, to the Shutoko network could increase social surplus while toll receipts of the highway company remain unchanged.
