Congestion, envy and equity

The Central Texas Regional Mobility Authority plans to add two lanes to MoPac between Lady Bird Lake and Parmer Lane.  The cool part of the plan is that it intends to use dynamic congestion pricing – i.e., the toll will fluctuate as necessary to keep traffic in the the tolled lanes flowing at 50 mph.   The six existing lanes will remain free.

This is how we ought to add new capacity.  It will make everyone better off.   The people who choose to pay the toll will be better off because they value the time savings more than the cost of the toll.  Bus commuters will be better off — they might be the biggest beneficiaries, in fact — because they will get a suddenly much shorter commute for (I presume) the same bus fare.  Drivers who continue to use the free lanes will endure slightly less congestion, even if it’s just a narrower period of peak congestion.  Finally, taxpayers, if not better off, will be no worse off because they won’t have to pay for the extra capacity.  The capacity will be paid by those who value and use it.

Everyone will not only better off compared to the status quo, but . . . and this is the key point . . . they’ll be better off than if the two new lanes were free.   Adding two free lanes would reduce congestion, too, but they would reduce congestion less than two new tolled lanes.  Tolling congested lanes increases their capacity.  A congestion-priced lane can handle 1,800-2,000 cars per hour; an unpriced lane during peak congestion will handle less than half of that.  Somewhat counterintuitively, perhaps, charging for a congested lane is a sure way to get more cars through it.