Citation

Discussion Paper Details

Please find the details for DP59 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: The Fundamental Theorem of Road User Charges

Author(s): David M G Newbery

Publication Date: April 1985

Keyword(s): Average Cost, Road Damage, Road User Charges and Social Marginal Cost

Programme Area(s): Applied Macroeconomics

Abstract: Highway Authorities are divided as to whether to charge road users the average cost of road maintenance or the social marginal cost of road use, which includes not only the extra maintenance costs, but also the increased vehicle operating costs attributable to the road damage caused by vehicle passage. The Fundamental Theorem states that in a steady state with a consistent (but not necessarily optimal) maintenance policy the two concepts are identical for zero traffic growth on uncongested roads for a wide class of road damage and vehicle operating cost functions, and approximately equal in other cases.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=59

Bibliographic Reference

Newbery, D. 1985. 'The Fundamental Theorem of Road User Charges'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=59