HOT or not: Driver elasticity to price on the MnPASS HOT lanes

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    Janson, M. and Levinson, D. (2014) HOT or not: Driver elasticity to price on the MnPASS HOT lanes. Research in Transportation Economics. [doi] (preprint)

    The Minnesota Department of Transportation (MnDOT) has added MnPASS High Occupancy Toll (HOT) lanes on two freeway corridors in the Twin Cities. While not the first HOT lanes in the country, the MnPASS lanes are the first implementation of road pricing in Minnesota and possess a dynamic pricing schedule. Tolls charged to single occupant vehicles (SOVs) are adjusted every 3 min according to HOT lane vehicle density. Given the infancy of systems like MnPASS, questions remain about drivers’ responses to toll prices. Three field experiments were conducted on the corridors during which prices were changed. Data from the field experiments as well as two years of toll and traffic data were analyzed to measure driver responses to pricing changes. Driver elasticity to price was positive with magnitudes less than 1.0. This positive relationship between price and demand is in contrast with the previously held belief that raising the price would discourage demand. In addition, drivers consistently paid between approximately $60–120 per hour of travel time savings, much higher than the average value of time. Reasons for these results is discussed as well as the implications these results have on the pricing of HOT lanes.

    Keywords
    Road pricing; Toll roads; Demand elasticity; High-occupancy toll lanes; Managed lanes; High-occupancy vehicles