An analysis of the welfare loss due to the non-application of peak-load pricing to the South Luzon Expressway

• Main Authors: De Lange, Philip, Suarez, Paolo, Yu, Michael
• Format: text
• Language: English
• Published: Animo Repository 2006
• Subjects: Express highways > Rates > Peak load pricing; Express highways > Philippines; Peak load > Economic aspects; Economics
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7353
• Institution: De La Salle University

This paper measures the welfare losses due to the Non-Application of Peak-Load pricing to the South Luzon Expressway (SLEX). An econometric model was developed to estimate the cost of providing the throughput of the expressway to given amount of traffic volume, using traffic volume and CPI (as representative of inflation) as independent variables. The authors used time series data in the regression. Using estimated demand data as well as a marginal cost function derived from the estimated total cost function the authors were able to compute for an estimated optimal toll rate and after comparing this with the current toll rate used on the SLEX and estimating the amount of welfare loss it is recommended that Peak-Load pricing be applied to the SLEX.