Credit-Based Value Pricing in Texas: An Examination of the Issues (0-4119-S)

Market pricing has successfully been employed in many industries to regulate the demand for goods and services during periods of peak usage. Based on the findings from a small list of implemented congestion pricing - or- "value pricing" - projects in transportation., market forces also have the potential to significantly improve the efficient use of the transportation system. The use of traveler credits is an innovative method of value pricing that could potentially solve several transportation problems, such as traffic congestion and excessive vehicle emissions, while also overcoming equity concerns. This value pricing application, termed credit-based value pricing (CBVP), would involve travelers receiving an allocation of travel credits every period. Different travel behaviors would then cost the traveler different numbers of credits depending upon certain predetermined factors such as the level of congestion, the time of travel, the mode of travel, and/or the route chosen. Travelers frequently choosing high-cost credit trips (for example, driving alone on a congested freeway during rush hour) would find themselves short of credits prior to the next period and would need to purchase additional credits from travelers choosing low-cost credit options (for example, transit trips).