because the cost of collecting them is too high. But several major cities, including London and Stockholm, have found increasing tolls to be a very effective way to reduce congestion.Sometimes congestion is a problem only at certain times of day. If a bridge is heavily traveled only during rush hour, for instance, the congestion externality is largest during this time. The efficient way to deal with these externalities is to charge higher tolls during rush hour. This toll would provide an incentive for drivers to alter their schedules, reducing traffic when congestion is greatest.Another policy that responds to the problem of road congestion, discussed in a case study in the previous chapter, is the tax on gasoline. Gasoline is a complementary good to driving: An increase in the price of gasoline tends to reduce the quantity of driving demanded. Therefore, a gasoline tax reduces road congestion. A gasoline tax, however, is an imperfect solution, because it affects other decisions besides the amount of driving on congested roads. For example, the gasoline tax discourages driving on uncongested roads, even though there is no congestion externality for these roads.
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