The Economics of Queues and Waiting
Traffic, Congestion and Road Pricing
Roads are a giant queue, and charging drivers for using busy roads at peak times can reduce delays.
Traffic jams are queues on wheels.
Externality
Each driver adds to others’ delays without paying for it.
Congestion charges
London and Singapore charge fees to enter busy zones or roads.
Effect
Traffic falls and speeds rise, and revenue can fund public transport.
Politics
Charges are unpopular unless alternatives exist.
A charge zone
A city centre fee reduces cars, and buses move faster.
Assuming building more roads solves congestion
New roads attract more traffic.
Key takeaways
- Congestion is an externality.
- Charges reduce traffic.
- Revenue can fund transit.
- Alternatives are needed.
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