The AFFORD project for the European Commission has aimed to investigate the economic efficiency and equity effect of urban marginal cost pricing in transport, as well as its public, political and corporate acceptability (Milne et al 2000, 2001; Schade and Schlag 2000). To this purpose, strategic and tactical transport model simulations have been run for the cities of Edinburgh, Helsinki, and Oslo (Fridstrom et al 1999, 2000, 2001; Vold et al 2001a, b). In this paper, the authors focus on the Oslo case study. To enhance the acceptability of marginal cost pricing systems, it may be necessary to envisage schemes by which the revenue collected from private motorists is somehow redistributed to the public, in a way perceived as fair and equitable in relation to the income distribution. In this paper, special emphasis is therefore put on equity effects, as described by changes in the Lorenz curve or in the Gini coefficient, both of which are defined in terms of household income per consumption unit before and after revenue redistribution. The economic efficiency of marginal cost pricing is assessed by means of cost-benefit analysis, in combination with simulations made by the RETRO tactical model for the greater Oslo area.
Abstract