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NTL Classification:NTL-ECONOMICS AND FINANCE-ECONOMICS AND FINANCE ; NTL-PLANNING AND POLICY-PLANNING AND POLICY ; NTL-OPERATIONS AND TRAFFIC CONTROLS-Congestion ;
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Abstract:Nonlinear pricing is an unfamiliar term for a familiar idea. Linear pricing charges all consumers the same price for the same quantity of goods or services; in nonlinear schemes, the price varies, depending, for example, on quantity purchased or a consumer’s ability to pay. In Florida, transportation infrastructure is supported largely through gas taxes, but as cars have become more efficient or use nongas fuels, revenues from gas taxes have continued to decrease. An alternative to the gas tax is the mileage fee, which charges the driver according to vehicles miles traveled (VMT). The question is what pricing scheme best balances revenue needs with other considerations, such as socioeconomic equity.
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