The Optimal Mix of Pricing and Infrastructure Expansions to Alleviate Traffic Congestion and In-Bus Crowding in Grand Casablanca

Like in many large cities in developing countries, traffic in Grand Casablanca, Morocco, is congested and public buses are crowded. These conditions are alleviated by a combination of supply-side infrastructure expansions, such as more buses and new road capacity, and demand-side pricing instruments, such as parking and fuel taxes. Using an empirical urban transportation mode choice model for Casablanca, this study finds a mix of these expansion policies and pricing instruments to alleviate congestion and maximize aggregate social welfare. The optimal mix is sensitive to the marginal costs of the infrastructure expansions. If the city were to spread out in its periphery where land constraints do not exist and land is available at lower prices, a supply-side instrument, particularly the optimal expansion of roads, would be far more effective in achieving welfare gains than the use of optimal pricing instruments without new roads. By contrast, if the city were to densify in already built-up areas, land and other physical constraints and the high price of land may leave expensive “elevated roads” as the only option. In this case, demand-side instruments together with the elevated roads would equally contribute to reduce traffic congestion and in-bus crowding.