This paper was presented at the "User pay : transportation funding issues for the millennium" workshop. These proceedings are available on CD-ROM. This paper explores the use of prices or user charges to allocate road use. It begins with the question of "why prices exist in the first place"? What role do they play in markets for goods and services generally and are user charges appropriate for roads? Are there services like education, water, electricity, telecommunications and roadways that make them sufficiently different that prices should not be used in determining access? If not user charges then what? What is fair and what will ensure productive, allocative and dynamic economic efficiency? Where does fairness enter the equation? The second part of the paper examines what an efficient set of prices would be under conditions where demand is less than or equal to supply and when demand exceeds supply. Finally, the paper explores the question of what is the appropriate basis for prices or user charges, costs or benefits. (A)
Abstract