A direct redistribution model of congestion pricing Jerey L. Adler * , Mecit Cetin Department of Civil Engineering, Center for Infrastructure and Transportation Studies, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA Received 7 July 1999; received in revised form 1 December 1999; accepted 7 December 1999 Abstract This paper discusses a direct redistribution approach to congestion pricing in which monies collected from drivers on a more desirable route are directly transferred to users on a less desirable route. An an- alytical model for a two-node two-route network is developed. An example is used to demonstrate the applicability of this model. It is shown that this model of toll collection and subsidization will reduce the travel cost for all travelers and totally eliminate the waiting time in the queue. When compared against the social optimal assignment, the direct redistribution model yields almost identical results. Ó 2001 Elsevier Science Ltd. All rights reserved. Keywords: Congestion pricing; Value pricing; Electronic toll collection 1. Introduction In recent years congestion pricing has gained popularity as a method for managing peak-period congestion. If roadway users are forced to pay a toll that re¯ects the marginal cost that they impose on others, some, if not many, users may opt to modify their travel behavior. Several types of changes are possible, including taking a dierent route, traveling at a dierent time, switching modes, and chaining trips Harvey, 1994). Under ideal circumstances, congestion toll should be variable and computed in real-time based on the prevailing level of roadway congestion. The toll rate needs to be updated in real-time to re¯ect the actual marginal cost of each additional user. Although computing congestion tolls in real-time is possible from the technical aspect, having continuously changing tolls is not quite practical. Instead a step toll technique which is based on Transportation Research Part B 35 2001) 447±460 www.elsevier.com/locate/trb * Corresponding author. Tel.: +1-518-276-6938; fax: +1-518-276-4833. E-mail addresses: adlerj@rpi.edu J.L. Adler), cetinm@rpi.edu M. Cetin). 0191-2615/01/$ - see front matter Ó 2001 Elsevier Science Ltd. All rights reserved. PII:S0191-261500)00003-5