A consumer surplus analysis of market-based demand management policies in Southern California

The purpose of this paper is twofold. Primarily the paper makes a quantitative case for implememtation of market-based demand management policies, such as congestion pricing, to reduce urban traffic congestion and mobile-source air pollution. In addition the paper demonstrates the usefulness of the consumer surplus model for performing transportation policy analysis. The model is used to estimate that a fee of $0.05 per vehicle mile (roughly equivalent to a $1.25 per gallon gas tax) would increase the net transportation benefits of Southern California's surface transportation system by 10% from approximately $30 billion to $33 billion per year.