10-03 Towards Peak-Load Pricing in Metropolitan Areas: Modeling Network Activity

Project Number


Project Summary

Towards Peak-Load Pricing in Metropolitan Areas: Modeling Network Activity

Project Status


Project Report



Topic Area

Urban Mobility

P.I. Name & Address

Emeritus Professor, Sol Price School of Public Policy
University of Southern California
650 Childs Way
Ralph and Goldy Lewis Hall (RGL) 321
Los Angeles, CA 90089-0626
United States

Project Objective:
The proposed research addresses two timely and related questions. 1) How can we model the activity location and traffic effects of implementing peak-load pricing on selected routes in a major metropolitan area? and 2) What are the network and development effects of selected pricing choices, as discovered via an application of the model to the Los Angeles metropolitan area? Both are among the key questions facing urban transportation planners and policy makers in California and the U.S.

The Federal Highway Administration (FHWA) had in recent years been promoting High Occupancy Toll (HOT) lanes for some years under the previous administration's Value Pricing Program. In 2007, the Federal Transit Administration (FTA) proposed redefining fixed guideways to include dual use HOT/Bus Rapid Transit (BRT) lanes (Poole 2007). The Southern California Association of Governments provides anecdotal evidence that Metropolitan Planning Organizations (MPO) are responding to a seemingly more favorable view by the planning community and placing HOT/BRT projects into regional transportation plans. Congestion pricing may be an idea whose time has come.

Another auspicious development involves the possibility of what some have called "smart mobility." GSM-positioning and GPS-tracking technologies vastly expand the possibilities for traffic monitoring, congestion fee determination, and fast feedback to drivers. Whereas "Fastrak"–type toll collection has been available and implemented for some years, the possibilities for the application of modern telecommunications devices are just beginning to be explored. And with these new possibilities, the congestion pricing options are greater than ever. What are the advantages and disadvantages of HOT lanes, cordon pricing, toll roads, pricing on freeways, and their various combinations?

The planning challenge is that the abstract systemic representation embedded in the standard economic argument in favor of tolls is replaced by a complex physical network in the real world. It is becoming increasingly evident that, as important as pricing mechanisms are likely to become, their impact on levels of service in and the net efficiency of an urban network subject to piecemeal tolling schemes are difficult to predict (Gordon et al., in Richardson and Bae, 2008). And very little is known about how activities (population and employment) at various locations throughout a large metropolitan region would be impacted.

To help answer these questions, we plan to elaborate the Southern California Planning Model (SCPM) so that it can be used to determine the traffic and development effects of various pricing applications. In its current version, SCPM provides detailed impact information for the greater Los Angeles (five-county) metropolitan area. It estimates population and employment by major economic sector for 3,191 Traffic Analysis Zones (TAZs) and traffic flows by passenger and freight vehicles for 89,356 network links. This integrated model develops consistent economic and network equilibria. This unique capability has made it possible to apply the model to events that prompt concurrent changes in economic and network capability. On the downside, either manmade or natural disasters would simultaneously remove major highway bridges as well as key places of employment (Gordon et al. 2006). In a very different kind of application, highway capacity projects simultaneously add link resources to the network but remove residences and/or places of employment (Gordon et al. 2002 and Gordon et al. 2003).

Task Descriptions
(1)Conduct literature review to survey known relevant travel demand elasticities

(2)Develop a conceptual framework for extending SCPM to estimate link-specific and time-specific travel given the many options for off-peak travel

(3)Develop peak-load pricing functions for travel demand elasticities in SCPM

(4)Estimate the change of travel demands based on the relationship between peak-load pricing and travel demand elasticity in a dynamic equilibrium traffic condition

(5)Address computational constraints

(6)Examine HOV-HOT conversion options in the five-County SCAG planning region

(7)Simulate the effects of selected HOV-HOT conversions, including revenue generation

(8)Prepare and disseminate reports and refereed journal papers

Milestones, Dates:

Total Budget:

Student Involvement:
One graduate student at 50% effort, 12 months

Relationship to Other Research Projects:
Related to 99-25, 01-14, 07-19; part of the goods movement focus area

Technology Transfer Activities:
Project report will be posted soon

Potential Benefits of the Project:
Elaboration of the Southern California Planning Model (SCPM)

TRB Keywords:
SCPM, Goods Movement, Peter Gordon

Primary Subject:
3p.3 To find the link volumes, link travel times, and the travel demand levels that simultaneously satisfy the conditions for economic equilibrium on the network and are consistent with travel demand curves.