Author: Nicolas V. Serna
 

Abstract

Boston has long grappled with traffic. The city’s investment in the Big Dig—then the nation’s largest highway construction project—helped ease road congestion after opening in 2006. Yet the persistence of high traffic levels in the city and region reveals the limits of roadway construction. News roads are expensive, spur induced demand, and harm the environment. Despite Boston’s recent and substantial investments, the city in 2018 earned the spot of worst-congested city in the United States.

Rather than increasing the supply of roadways, congestion pricing offers a mechanism to manage the demand for these roads. By charging for road access during peak demand periods, congestion pricing attempts to shift demand from peak to non-peak periods, incentivize trip bundling, and/or induce people to shift to alternative travel modes. Congestion pricing has been implemented in a variety of forms globally and across the United States.

Any congestion pricing scheme must address questions of equity, particularly those related to a driver’s income and an ability to pay. However, congestion pricing helps address many outstanding equity concerns associated with private vehicle use. For example, Boston’s primary source of emissions come from driving trips into or out of the city. Meanwhile, vehicle usage by typically higher income households places health burdens on lower-income areas that drive significantly less. Of those people in the Boston urban area living immediately adjacent to a highway, nearly a quarter are in poverty and more than a third are nonwhite, significantly higher than the Boston area in general.

Case studies of Stockholm, California’s SR-91, and New York City reveal the possible equity implications associated with congestion pricing and policy implementation strategies. Several themes emerge from these locations. First, that public acceptance of these policies can be difficult and requires some form of urgency—typically excessive traffic or funding needs—to precipitate action. Second, that any pricing system must provide a clear benefit-cost tradeoff to the public. Typically, that has meant substantial transit improvements prior to the launch of congestion pricing. And third, congestion pricing can prove its worth and overcome public skepticism, although it requires substantial price differentials to shift demand. Indeed, all income groups can benefit from flexibility and time-savings associated with a congestion scheme.

Analysis of the 2011 Massachusetts Travel Survey (MTS) reveals the extent to which commuters driving into Boston come from higher income households. Boston’s geographic and socioeconomic distribution in 2011 indicate that a small share—approximately 2%—of commuters from Boston’s surrounding communities drive into the region’s central zone and are from below median household incomes. And of just those commuters who travel into the central zone from a surrounding town, only about 11% fit this profile. This report estimates that only about 3% of Massachusetts Department of Transportation (MassDOT) toll revenue came from that commuter group. That few radial commuters are lower income drivers points to the feasibility of providing discounts, waivers, or other equity mitigation strategies while maintaining the pricing scheme’s effectiveness to reduce congestion and/or raise revenue.

The preponderance of higher income commuters who drive into Boston presents a strong fit for a congestion pricing scheme. Implementation of this pricing should follow a three-phase time horizon: a near-term pilot, a medium-term permanent policy, and long-term comprehensive policy for the region. A pilot should focus on gauging user responsiveness via discounts on existing MassDOT tolls, which enables short-term testing without a costly transit service change or large equity adjustments. A permanent policy as envisioned in this document would involve expanding some form of tolling to the major roadways into Boston. MassDOT could utilize geography and means testing to mitigate impacts on lower income drivers, while also retaining the policy’s effectiveness. Over the long term, the region can consider congestion pricing as an alternative to the motor fuel tax (“gas tax”) to more tightly align the burden of highway costs with those who use those roads.

Greater Boston already indirectly bears the costs of congestion, through lost time, higher driving costs, and worse health. In an era of persistently clogged roadways, already-expanded highways, and a surge in ride-hailing apps, congestion pricing acts as mechanism to direct the costs of overused roads to those who create these burdens.

Citations

Serna, Nicolas V. 2023. Managing Traffic in Massachusetts: Assessing the Potential Income Equity Impacts of Congestion Pricing in Greater Boston. M-RCBG Associate Working Paper No. 129. Cambridge, MA: Mossavar-Rahmani Center for Business & Government, Harvard Kennedy School. http://www.hks.harvard.edu/sites/default/files/centers/mrcbg/files/AWP_129_final.pdf.