Thursday, May 18, 2006

Road pricing news

Robin Lindsey surveys what economists have to say about road pricing in the latest Econ Journal Watch. Yes, most economists think that rationing via price is best. Ken Orski presents a news round-up that suggests we may be near a "tipping-point" -- and tipping towards a more favorable reception by policy makers.

That would be nice. I recently attended a workshop at Churchill College in Cambridge and learned a bit about the London experience. It appears that implementation costs were high enough to suggest that the benefit-cost ratio is unfavorable. That may a case of early adopers. But the role of early adopters -- absorbing high prices and permitting them to start falling -- is well established in the markets for new products. Whether it applies in the policy world is anybody's guess.