The Role of Deadweight Loss in Congestion Pricing

This thesis considers the role of deadweight loss in evaluating the economic benefits of implementing a congestion-pricing scheme. A first-best pricing scheme is simulated using the Edmonton Regional Transportation Model for two cases: a base case, and an increased density case. The volume-delay functions in the model were differentiated to simulate the marginal costs travellers would face. The resulting deadweight loss values indicate that the economic costs arising from a lack of congestion pricing may not be very large in comparison to other cost measures. The outputs from the simulations compare to values for other cities where congestion pricing schemes have been implemented, suggesting the process is appropriate.