https://boiseguardian.com/2005/05/17/speed-sells/ A different slant on the news. Fri, 05 Aug 2005 14:18:02 +0000 hourly 1 https://wordpress.org/?v=6.9.4 https://boiseguardian.com/2005/05/17/speed-sells/#comment-7 Fri, 05 Aug 2005 14:18:02 +0000 https://boiseguardian.com/wp/?p=5#comment-7 One policy response to the problem of congestion is to use the mechanism that works so well throughout the market economy: pricing. Congestion is considered an external cost (or “externality”) by economists. A motorist on a busy highway not only incurs a cost of delay but also imposes that cost on other motorists. Introducing congestion pricing on a crowded highway–that is, charging tolls that are higher during peak times of the day and lower during off-peak ones–has two economic effects. First, it dampens demand for the highway during the most congested periods by inducing some motorists to alter their travel plans. Some drivers will be able to modify their schedules so they use the road at less busy times. Others will find alternative routes or switch to public transit. Second, continued demand in the face of appropriate congestion pricing serves as a signal for additional investment in road capacity.

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