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Title:: Theoretical analysis, experience reference and preliminary conception of traffic congestion pricing in China

Author(s):: SONG Shun-feng; WANG Jia-ting; Department of Economics, University of Nevada; School of Economics and Management, Tianjin Chengjian University;Research Center of China Urban and Regional Economies, Nankai University

Keywords:: traffic congestion pricing; commuting paradox; urban traffic; traffic supply; road extension; license plate limited rule

Abstract:: As the rapid development of traffic motorization and personal cars, major cities are suffering from traffic congestion in varying degrees. In the past, solving traffic congestion problem mainly relied on the supply policy and administrative measures. However, practices have proved regulation by supply policy tends to fall into the vicious circle of “traffic congestion, road expansion, private cars increased, public transport demand reduced and traffic more crowded”. Basing on Downs Thomsons commuting paradox and Braess, this article proves respectively that under certain conditions, improving road traffic capacity is ineffective or even counterproductive. By analyzing the principles of the economics of traffic congestion pricing, it proves that congestion pricing can effectively solve the commuting paradoxes. This article introduces the international experience of congestion pricing; and it discusses the necessity and feasibility of the implementation of congestion charging in China, stressing that China should be combined the problem with the policy of supply and demand, using the charging mechanism to correct market failure, and guiding people to travel reasonably, so as to ease traffic congestion, and developgreen urban traffic.