Toll price: traffic demand elasticity analysis on variable priced toll bridges

The increasing use of time-of-day toll rates necessitates additional examination of methodologies used to calculate changes in the traffic stream due to these variable toll rates. Traditionally, changes in traffic volumes and the resulting changes in toll revenues have been calculated based on the change in 24-hour traffic volumes. This approach was sufficient to calculate revenue changes under a uniform toll change. However, with the increased usage of time-of-day pricing this method does not provide sufficient information. An initial approach to these new variable toll rates could be to apply a single elasticity calculated (or projected) for the facility to each individual price change interval. This would provide an estimate of traffic changes in each period impacted by the variable toll. A daily revenue stream could then be calculated based on a summation of traffic volumes and associated revenues over time. This approach, however, assumes that elasticity remains constant through the day. A significant failure of that assumption could lead to over or under statement of the toll revenue stream. This paper examines how toll price-traffic demand elasticities vary by time of day to gain some initial insight into the problem of assuming a uniform elasticity throughout the day.