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The Effects of Vehicle Miles of Travel Pricing on Travelers in Different Income Groups

January 6, 2010

The Effects of Vehicle Miles of Travel Pricing on Travelers in Different Income Groups

I.             RESEARCH PROBLEM STATEMENT

Transportation’s impact on the economy is well documented. The Bureau of Transportation Statistics estimates that in 2007 transportation-related goods and services contributed $1.45 trillion to the $13.8 trillion U.S. Gross Domestic Product; about 10.5 percent.  However, traditional funding mechanisms – primarily the gas tax – are quickly losing their ability to fund the transportation system and will likely be phased out in the next decade.

A likely successor to the gas tax is a fee based on a drivers’ vehicle miles traveled (VMT).  The concept has been endorsed by The National Surface Transportation Infrastructure Financing Commission, the Nation Surface Transportation Policy and Revenue Commission, and the Transportation Research Board.

Prior to such a monumental change in the pricing structure for transportation services, there needs to be extensive research done on the new pricing system’s impact on all areas of transportation.  Driver behavior will likely change due to the new pricing strategy and, therefore, designing a system that both provides necessary revenues and increases the efficiency of the system would be optimal.  However, those cannot be the only concerns as some travelers, particularly low income travelers, may be negatively impacted by this system to a point where their mobility is severely hampered unless these impacts can be anticipated and mitigated.  This research focuses the impact of a VMT on drivers based on their income group.

II.            OBJECTIVE

The objective of this research is to identify how various VMT pricing structures may impact travelers – broken down by the income group of those travelers.  This should include a comparison of how the VMT pricing strategies impact driver behavior as compared to the current system of financing.  This will provide decision makers much needed information on the impacts of VMT pricing options including equity impacts.

III.          RESEARCH PROPOSED

This research would combine information gathered from the literature and small scale pilot VMT trials, with surveys of travelers.  The goal of examining the data from the literature and the small scale VMT trials will be to identify the different VMT pricing strategies already tested and carefully examine how each impacted travelers of different income levels.  This will also help to identify what VMT pricing strategies have not been examined.  Based on those findings, the research would then survey travelers to estimate their behavioral changes to several other VMT pricing scenarios.  These results would be examined based on the income group of the traveler.  Results from all of these investigations would be summarized in a final report.

IV.          ESTIMATE OF THE PROBLEM FUNDING AND RESEARCH PERIOD

This research will require two years to complete.  The first year would be to gather and analyze data from the existing VMT trials plus the literature.  The second year would be for administering surveys and preparing the final report.  Estimated cost is $300,000.

V.            URGENCY AND PAYOFF POTENTIAL

The gas tax will likely be replaced within a decade and the need to understand the impact of that change is critical.  Research such as this is needed in order to take the first steps towards identifying the most appropriate VMT pricing system.  Equity and the impact on low income travelers will be a significant consideration when the VMT system is debated.  Therefore it is important to learn early on how various VMT systems will impact low income travelers.

VI.          RELATED RESEARCH

There have been several small pilot tests of VMT pricing around the country (Oregon, Iowa and Washington for example) and the topic is gaining interest in the literature.  An upcoming research project will be using experimental economics approaches to test various VMT policies on laboratory volunteers.

Sponsoring Committee: ABE25, Congestion Pricing
Date Posted: 01/06/2010
Date Modified: 01/06/2010
Index Terms: Vehicle miles of travel, Congestion pricing, Road pricing, Economic benefits, Travel surveys,

Subjects
Transportation (General)
Finance
Economics
Policy

Please click here if you wish to share information or are aware of any research underway that addresses issues in this research needs statement. The information may be helpful to the sponsoring committee in keeping the statement up-to-date.

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