Estimating congestion toll by using traffic count data – Singapore's area licensing scheme

There are many studies on the Area Licensing Scheme in Singapore. One of the debatable issues is whether or not the congestion toll of $3 is too high. The main objective of this paper is to develop a simple method for estimating the congestion toll by directly using the commonly available traffic count data. In our sensitivity analysis, we use three different scenarios on the choice of the value of travel time savings and four different measures of average wage rates (the national average wage rate, the average wage rate for car owners with or without taking into consideration employment benefits, and the average wage rate per car derived from the average occupancy per car). The sensitivity analyses led to a general conclusion that by 1990, the $3 fee was not too high. We also highlight the fact that it is possible to iterate to the optimal congestion toll by comparing the theoretical congestion toll with the actual toll even when the demand curve is unknown.