Financing Decision Model for Toll Roads: Balancing Economic and Public Attributes

Abstract

Two common attributes are associated with toll roads: an economic attribute and a public attribute. These attributes are not equalized—the higher the economic benefits, the lower the consumer surplus. This paper presents a quantitative decision model for selecting an optimal financial method for toll roads that balances these attributes. In the model, the public welfare coefficient is introduced to measure the value of the public attribute, which is considered under the assumption of user heterogeneity. The operational coefficient uses profit margin in the measurement of the value of the economic attribute. Based on the analysis of financing methods and their scope of applications, the findings reveal that different combinations of attribute values correspond to different optimal financing methods. A simplified network with one origin–destination (O-D) pair was used to test the model in reference a case study. The results provide new insights on and implications of the influence of price and capacity in selecting the financing method.