the 38th Congress of the European Regional Science Association

Congestion, air pollution and noise caused by increasing use of the car are nowadays perceived as some of the most pressing problems in urban areas. The introduction of road user charges (road pricing) is a common proposal to solve or reduce these problems, however, its public acceptance is rather low because it is considered as unjust. Therefore, this study investigates in detail the equity issue of road user charges and analyses the distribution of costs and benefits among different groups. One group particularly affected by road pricing and analytically separable is the group of commuters. So, this paper analyses empirically the issue of the distributional impacts of road user charges on this group. After specifying the decision of the commuters within a microeconomic framework, a binary logit model for mode choice was developed and estimated using disaggregated work trip data from Dresden. Subsequently, measures of users ’ benefit that were derived for discrete choice demand models were applied to the estimated demand functions for the different modes. In this way it was possible to calculate the changes in commuters welfare for the introduction of different simple toll- 2-schemes. This analysis was conducted for commuters from different income groups. Finally, measures of inequality for situations with and without road pricing were compared.- 1-