When users of congested roads may view tolls as unjust

Abstract

Though congestion tolls can increase social welfare, the public often opposes them. One explanation for the opposition is that a road user views a congestion toll as punishment for the damage he causes others. Since a user suffers from congestion, he believes that he has already suffered some punishment and therefore it is unfair or unjust to impose a toll in addition. We assume that a person views a congestion toll as unjust if the toll exceeds the difference between the congestion externality a road user generates on others and the uncompensated externality he suffers from others. We explore the implications of such a view. We illustrate how to determine the toll that satisfies this criterion of justice and how the socially optimal toll violates the criterion. We examine how the just toll varies with the parameters of the model. We discuss the implications of alternative definitions of justice and possible extensions of the basic model considered.