It is not difficult to propose ten key changes to help alleviate congestion, including the obvious three - the school bus run, multiple-person lanes, and double-decker trains. The entire transport system requires modernising - bus stations must be located adjacent to train stations, and separate bus and cycle lanes should be the norm, not the exception." (Ralph Shiell, March 20, 2006)
"Of these policies, congestion pricing is the one that probably has the greatest potential for reducing congestion." (B. Starr Mcmullen, 1993) Road pricing has been given attention since the early works of Pigou (1920) and Knight (1924). In the 1920s, the spiritual fathers of road pricing, Pigou (1920) and Knight (1924) used the example of a congested road to make their points on externalities and optimal congestion charges. They argued that road users should be charged their marginal external congestion costs. This has remained the leading principle in the transport economic literature on road traffic congestion. Given the growth in road traffic and its adverse side effects, road pricing has become an important contemporary policy issue.
Pigou's innovative work, a large variety of possible approaches to studying the economics of road traffic congestion and road pricing has been developed. ...
(1993) from an interview study of London residents, conclude that road pricing is more likely to be accepted if the system is simple, enforcement is guaranteed, and the revenues used in a transparent and equitable manner. May (1992) asserts, however, that 'it has to be expected that any form of road pricing will introduce some inequities: The key is to keep these to a minimum.' Daganzo (1995) approaches the issue from the other side, by proposing a combination of rationing and pricing that reduces the size of money transfers. Else (1986) mentions the possibility of leaving the road users with a choice of paying a toll and queuing.
Economists have long advocated marginal cost pricing to allocate scarce highway capacity, especially under congested road conditions (Morrison, 1986; Borins, 1988; Hau, 1990). Road pricing involves charging higher road prices during peak hours when traffic volume exceeds road capacity. If road users were made to pay the full marginal social cost of using the highways, urban geography and commuting patterns would be different from what they are today (Newberry, 1990)
Types of Road-Pricing
Despite problems of social and political feasibility, road pricing in various forms has been, or soon will be introduced in a number of cities. Various types of road pricing exist, and furthermore, road charging in its strict form is only one possible fiscal instrument to deal with road traffic congestion. The Singapore area licensing system offers one example of a well-established system, and the toll rings in Norwegian and Swedish cities offer evidence that the political opposition to charging for the use of urban streets, can be overcome. Other fiscal instruments offering a quasi road pricing approach are also in use. Parking fees, for example,