The Benefit and Cost Analysis of Distance-based Electronic Toll Collection Systems: The Case of Taiwan

Abstract

This study analyzes the benefits and costs of distance-based electronic toll collection (DB-ETC) implementation in Taiwan The items of relevant costs and benefits perceived by road users toll operator and government are calculated respectively using developed assess formula and the data collected from the authority toll operator and related studies The values of net benefits for the DB-ETC are presented in the forms of net present value (NPV) benefit-cost ratio (BCR) payback period (PP) and internal rate of return (IRR) The empirical results are summarized as follow First of all the implementation of the DB-ETC is an appropriate and correct policy Total social net benefits are positive under two pricing schemes (i e scenario A is a high road charge rate with free mileage but scenario B is a low road charge rate without free mileage) representing the DB-ETC benefits are occurred to the whole society and the advantages far outdo the disadvantages Further the comparison of social net benefits generated in the two schemes reveals that scenario B is a better option The reason mainly lies in that a low road charge rate boosts the demand of freeway road users The decision of whether road users enjoy a free mileage is only the matter of money transfer from road users to the government Scenario B is also consistent with the core concept of DB-ETC “user pays” Nevertheless the social net benefits at scenario A are even much higher than those elicited from toll station based ETC (TSB-ETC) This study has added several contributions to the existing literatures It is the first to entirely implement the DB-ETC for toll collection in its freeway system (Cnyes 2013) To the best knowledge this study is the first one to evaluate the benefit and cost of the DB-ETC Further as compared to previous literature more scopes of inflowing/outflowing road users and benefit and cost items are covered in this analysis In particular the spillover effect of the DB-ETC in freeway on other traffic networks in addition to the benefits and costs of inherent freeway road users are considered In this study social net benefits are evaluated and compared at different pricing schemes and the discussion is offered for explaining the difference in the net benefits Finally these benefit and cost items of the DB-ETC are measured in monetary terms Hence an academic reference is provided for the government in educating the public the benefits of DB-ETC and making road pricing decision in the future

Date of Award	2014 Aug 15
Original language	English
Supervisor	Chun-Hsiung Liao (Supervisor)