ABSTRACT
This chapter discusses the nature of congestion, the economic fundamentals of road user charging, the welfare implications of road user charging and the difficulty in calculating an optimal charge that is variable with respect to vehicle type, road type and traffic conditions. It highlights how important it is to allocate the revenue raised from the introduction of a road user charge since there are distinct groups of motorists who are made worse off by the implementation of a charge. Goods in category A are both non-rival and non excludable and as such can be classified as pure public goods. By contrast, goods in category B are non-rival in consumption but excludable. Clearly road user charging could exclude traffic from urban roads. It is however useful in establishing a framework and certainly in terms of an urban road network category B, and the theory of clubs would appear to offer an insight into the whole area of congestion.
