Impact of Variable Pricing on Temporal Distribution of Travel Demand

Abstract

Despite the potential of congestion pricing to ease the nation’s ever-increasing congestion problems, there is little quantitative evidence of its ability to spread peak travel demand more efficiently over the course of the day. The objective of the present work is to assess the impact of variable pricing on the temporal distribution of demand to investigate further the role of variable pricing as a travel demand management tool. The Variable Pricing Program of Lee County, Florida, was used as the data source for the study. Because of the limited congestion experienced at the program location, the effects of travel cost changes on the temporal distribution of demand could be isolated. It was found that program implementation had a minimal impact on the overall distribution of demand. Demand for peak-period travel remained relatively unaltered, and active peak spreading was not observed. At the more disaggregate level, however, the impact of the program was more apparent, with significant temporal shifts in the proportion of demand within individual half-hour time segments. Further analysis revealed a price elasticity relationship that was consistent with that in the existing literature. A relationship was also observed between the extent of preprogram peak spreading and the subsequent percent reduction in peak-period travel demand after program implementation. This finding suggests the potential to predict the active peak spreading that may result from congestion pricing. The fact that substantial temporal shifts in travel demand were observed in response to a discount of only 25 cents highlights the potential of variable pricing as a travel demand management tool.