Friday, July 07, 2006


Speed limit as a Pricing mechanism

This article in the WSJ reminds me of a thought I had many moons ago. I was thinking about how individual drivers might use the speed limits of varying arterial roadways and highways as a pricing mechanism for usage. Of course they take into account expectations of time delays, congestions levels, and risk of accident or injury as well. Given the lack of an actual explicit pricing system, this might serve as a proxy.

Although it is treated much like a congestible public good and provided by all levels of government, transportation services can easily be carried out in the private sector and had been up until recently.

Any thoughts?

To clarify: American roads (toll roads, turnpikes, and plank roads) have a long history of being provided by local communities and private companies. Until Eishenhower, there wasn't any nationwide movement (unless I am mistaken) to provide roads across the country.
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