THE OPTIMAL LOCATION AND ROAD PRICING FOR AN ELEVATED ROAD IN A CORRIDOR

This paper discusses the location decision of an elevated new road on a corridor. The distribution of residents is uniformly located along this corridor and each individual makes trips to the CBD at the end-point of the corridor. Trip demand is elastic and dependent on the cost of car trip that incorporates congestion cost. Government is assumed to build a new elevated road on this corridor to reduce the traffic congestion but have to decide where to locate the entrance of this elevated road. The optimal location of the new elevated road depends on the following factors: (1) the toll of this new road; (2) the demand parameters; (3) the travel cost parameters; and (4) the construction cost parameters. We explore the effects of determining the location of elevated road entrance and the toll on the road based on a simple spatial model with welfare-maximizing objective of the government. The result also shows that for a given toll, the ratio of taking elevated road is monotonically decreasing as the location of entrance set outward from the CBD. The social optimal location of the entrance and the second-best toll is obtained from a set of numerical examples.