SECOND BEST PRICING OF EXPRESSWAY WITH REFERENCE TO MAINTENANCE COSTS

Abstract

 This study considers a road network where a highway and a local road run in parallel and theoretically analyze the second best pricing of the highway toll. The purpose of the second best pricing is to internalize the external diseconomies of congestion and deterioration of the road structures accompanying the road use. In the analysis, we pay attention to the two facts; one fact is that the influence on the deterioration of the road structures differs between large size cars and standard size cars. The other fact is that the load bearing capacity of the road structures differs between highway and local road. Paying attention to these facts, we analyzed the second best highway toll which minimizes the total social cost including the congestion costs and the road maintenance costs by controlling the route choices of the users. The analysis shows that discriminatory toll pricing of two vehicle types has an important effect to improve the validity of the maintenance cost reduction by toll settings.