Credit-Based vs. Discount-Based Congestion Pricing: A Comparison Study

Abstract

Credit-based congestion pricing (CBCP) and discount-based congestion pricing (DBCP), which respectively allot travel credits and toll discounts to subsidize low-income users' access to tolled roads, have emerged as promising policies for alleviating the societal inequity concerns of congestion pricing. However, since real-world implementations of CBCP and DBCP are nascent, their relative merits remain unclear. In this work, we compare the efficacy of deploying CBCP and DBCP in reducing user costs and increasing toll revenues. We first formulate a non-atomic congestion game in which low-income users receive a travel credit or toll discount for accessing tolled lanes. We establish that, in our formulation, Nash equilibrium flows always exist and can be computed or well approximated via convex programming. Our main result establishes a set of practically relevant conditions under which DBCP provably outperforms CBCP in inducing equilibrium outcomes that minimize a given societal cost, which encodes user cost reduction and toll revenue maximization. Finally, we validate our theoretical contributions via a case study of the 101 Express Lanes Project, a CBCP program implemented in the San Francisco Bay Area.