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Taking the 'Free' Out of Freeways

Americans prize their freedom of speech, religion and assembly, but according to transportation economist David Lewis, "some perceive the 'free' in 'freeways' as close to a civil right" as well.

In a new discussion paper issued by the Hamilton Project of the Brookings Institution, Lewis proposed a framework for reducing the nation's snarled peak-hour traffic with the use of congestion pricing, which could take the form of charges applied to use all congested roads within a certain geographic region, variable charges on specific roadways (a model familiar to turnpike drivers), variably priced lanes (such as express toll lanes), or charges to drive in a congested area within a city (the most well-known example being London's, with New York angling to join in, too).

Lewis framed traffic congestion in classic economic terms: "Time spent in traffic jams is the manifestation of roadway supply falling short of the demand for travel." As noted in a recent piece on carpool lanes on, the benefits of high-occupancy vehicle (HOV, or carpool) lanes in reducing traffic congestion are limited, and Lewis cited Transportation Research Board figures indicating that fewer than 10 percent of all passenger trips are made by means of public transit — despite record-high gasoline prices.

According to Lewis, alternative transportation is underutilized because travelers, while they take into account their own costs when deciding on a means of transportation, fail to consider the external costs of using a congested roadway, such as damage to the environment and other people's lost productivity. And because congestion pricing exists for less than 1 percent of congested roadways in the U.S., most travelers don't pay for those external costs, either.

"External costs exceed private costs by 25-56 percent," Lewis reckoned. "If the price of any other good or service were set so far below its cost, it would surprise no one to find that its demand routinely outstripped its supply and that there would be very low demand for substitutes." Because the federal government provides most of the funding for the interstate highway system and many other major roadways, Lewis proposed that it use this leverage to encourage state and local agencies to adopt congestion pricing for new construction or improvements to existing interstates and freeways where traffic volume exceeds capacity by 70 percent. The incentive, under Lewis's proposal, would be either reduced federal matching funds for failure to adopt congestion pricing or a "bonus" match for instituting congestion pricing-both options that Lewis prefers to a federal mandate of congestion pricing. Research by the Texas Transportation cited in Lewis' paper indicated that the average rush-hour driver spent an additional 38 hours and used an extra 26 gallons of gas while stuck in traffic in 2005. By contrast, Lewis asserted that both analytical models and the real-world experiences of cities such as London and Stockholm that have adopted congestion pricing suggest that "journey speeds, travel times and travel time reliability would improve."