Income-Based Equity Impacts of Congestion Pricing—A Primer

Conclusions

Any change in the way charges are made for road use will benefit some individuals more than others. Those who have higher incomes will tend to use congestion-priced facilities more often, which leads to a perception that wealthy people are favored; however, income-related equity concerns may not be entirely warranted. Although data from priced lanes that are operated in the United States show that high-income motorists do use the lanes more often, the lanes are used by all income groups, serving drivers’ needs when they absolutely have to get to their destinations on time (e.g., getting to a daycare center before late fees kick in). Moreover, approval ratings are equally high for all income groups, in the 60–80 percent range, because all income groups value the “insurance” of a reliable trip time when they absolutely need it.

Low-income travelers who take transit more frequently will benefit from transit-service improvements that generally accompany congestion pricing. Toll revenues can be used to compensate those who might otherwise consider themselves “losers” as a result of congestion pricing. Low-income transit riders can benefit significantly from toll-financed transit improvements, which are generally included in any pricing package. In cases in which effects on low-income drivers are perceived to be particularly severe, such drivers could be provided with toll exemptions, rebates, or other forms of monetary compensation, such as tax rebates or income supplements. Pricing schemes may include protections for low-income individuals, such as toll credits.