Policy Studies Competition Policy

Why road pricing matters

Road pricing — the use of fees or tolls applied to road usage — is the most promising tool we have to improve the productivity of America’s aging surface transportation infrastructure. But while transportation experts generally are enthusiastic about road pricing, voters are not.

There are exceptions. Successful toll roads have made believers out of at least some skeptical drivers, and voters in regions with particularly high congestion levels have at times been open to road pricing proposals. But political resistance to road pricing has been a huge obstacle to its spread.

That has to change. The potential benefits of road pricing to reduce congestion and air pollution, to boost economic growth and to improve the quality of infrastructure, are so great that we can ill afford to pass them up. Building support for road pricing requires changing how the public thinks about infrastructure. More broadly, it will require revamping the institutions that govern U.S. infrastructure.

In 2009, the National Surface Transportation Infrastructure Commission estimated the federal government would have to devote $59 billion per year to highway and transportation spending to maintain U.S. infrastructure at current levels, and $78 billion per year (in 2008 dollars) to meet the design standards set by transportation planners.

Drawing on data from the National Cooperative Highway Research Program, economists Matthew Kahn of UCLA and David Levinson of the University of Minnesota estimate maintaining and operating existing roads at current levels of performance will require $145 billion per year (in 2007 dollars), an amount that also takes into account spending at the state level.

The costs of actually upgrading U.S. infrastructure to reduce current congestion levels are expected to be higher still. The 2012 Texas Transportation Institute Urban Mobility Report, published by the Texas Transportation Institute at Texas A&M University, finds total congestion costs for urban areas reached approximately $121 billion in lost productivity in 2011, a reflection of, among other things, 5.5 billion hours in travel delays. Congestion costs peaked in 2005, at $128 billion in lost productivity, an amount that likely will be surpassed as the U.S. economy recovers in the coming years.

Featured Publications