By Jane Silfen
Variable toll pricing is used to regulate demand and, therefore, capture the value of motorists’ time savings. Dynamic toll pricing is popular in Europe and limited U.S. evidence seems positive. However, faced with environmental, budgetary, and socioeconomic challenges, how should transportation authorities consider the benefits and complications of variable pricing?
Dynamic tolling does seem effective in reducing congestion and capturing perceived time savings. A study of SR-91 in California concluded that most drivers use the express lane some, but not all, of the time dependent largely on the hour-by-hour price differentiation. The study also found that drivers overestimated—and thus were willing to overpay for—the amount of time they saved. Increased interested in managed lanes is evident from Texas to Colorado to Virginia, among others, suggesting perceived environmental benefits from reduced emissions and economic benefits from reduced congestion and incremental revenues.
This narrative makes sense in theory, but I would add a practical concern about the economics of variable pricing. It seems harder to forecast, particularly for greenfield projects. Toll authorities (and potential investors) must speculate on both demand for a route and willingness to pay for that route. Amid tight public budgets and spooked markets, does variable pricing provide net incremental value or risk?
Equity is also a matter of theory versus practice. Dynamic tolling is theoretically fair. Those who ascribe a higher value to their time should use express lanes more frequently and at a higher cost. This argument seems to hold up with both motorists and the public, with the U.S. Department of Transportation concluding that, “the perception that congestion pricing is an inequitable way of responding to the problem of traffic congestion does not appear to be borne out.” Practically, though, this means that rich people—whose time is worth more because they make more—take the express lanes, almost always, and poor people—whose time is worth less because they make less—take the free lanes, mostly. Might this give rich people more time to make more money, and poor people less time to make more money? In a country marked by widening income dispersion, is good transportation policy good public policy?
On balance variable tolling seems good for most: drivers have more choice, roads make more money, air and noise pollution from congestion goes down. However, there are some additional questions that toll authorities should consider before continuing the rollout of managed lanes across the U.S.
 “Managed Lanes: A Cross-Cutting Study,” U.S. Department of Transportation, Federal Highway Administration Office of Operations, November 16, 2006 accessed via http://ops.fhwa.dot.gov/freewaymgmt/publications/managed_lanes/crosscuttingstudy/chapter3.htm on February 10, 2013
 “Continuation Study to Evaluate the Impacts of the SR 91 Value-Priced Express Lanes Final Report,” U.S. Department of Transportation, Federal Highway Administration Tolling and Pricing Program, April 20, 2011, accessed via http://ops.fhwa.dot.gov/tolling_pricing/value_pricing/pubs_reports/projectreports/sr91_expresslanes.htm on February 10, 2013
 “Income-Based Equity Impacts on Congestion Pricing – A Primer,” Federal Highway Administration Tolling and Pricing Program, May 8, 2009, accessed via http://ops.fhwa.dot.gov/publications/fhwahop08040/cp_prim5_04.htm on February 10, 2013