Congestion charging and factors that determine the willingness to pay for congestion reduction in Addis Ababa City, Ethiopia

• Published in: Case studies on transport policy 2024-09, Vol.17, p.101265, Article 101265
• Main Authors: Bekele Gunjo, Semen, Diriba Guta, Dawit, Damene, Shimeles
• Format: Article
• Language: English
• Subjects: Congestion pricing; Heckman; OLS; Tobit; WTP
• ISSN: 2213-624X
• DOI: 10.1016/j.cstp.2024.101265

•The paper identified the willing to pay and the payment amount for hypothetical congestion charging policy.•Lambda (λ) that relates the decision to participate and the value of the payment has statistically significant value.•Heckman two-step selection model explains the model better than Tobit model.•The willingness to pay amount of birr 2.7 ($0.053) per km was estimated.•Aggregate willingness to pay estimates of 32.6 million birrs each year in the study segments. Over the last two decades and a half, the Ethiopian government has been involved in extensive road construction as part of successive road development plans that have significantly increased road network coverage. However, the tendencies that worsen congestion show no signs of abating. As a result, drivers and passengers waste time in long traffic lines, rendering modern travel unreliable and increasing travel costs due to delays. To curb the problem, the remedies proposed by practitioners or researchers are mostly centred on the supply side. This study aims to determine drivers’ willingness to pay (WTP) (from the demand side) for a hypothetical congestion reduction project. A stated preference survey was utilised on the population identified in nine segments in Addis Ababa’s Kolfe Keraniyo sub-city. The data was gathered from 1012 respondents using a survey questionnaire based on the contingent valuation method (CVM). Tobit and Heckman two-step selection models were used to estimate factors determining WTP for congestion reduction. Accordingly, the analysis showed that the average amount of willingness to pay by drivers was estimated to be birr 2.7 ($0.05) per km. Education, marital status, income, segment use, and trip frequency significantly determined the outcome equation, while age, gender, income, occupation, work experience, and regularity and frequency of segment use were found to determine the decision to participate in WTP to accept congestion pricing. Identifying the willingness to pay and the desired price can assist the Addis Ababa City Administration in establishing a baseline for any future congestion reduction strategy based on congestion pricing.