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Traffic congestion has been observed to be a rising issue in the current days around the world. By scaling down this problem to the city-level, this thesis aims to find a solution that is feasible for the city of Bengaluru by estimating commuters’ Willingness To Pay (WTP) for a congestion fee. Congestion fees are a traffic demand-management policy tool that have proven to reduce traffic volumes and emission levels in cities around the world. The study will make use of primary data collected through interviews of citizens that own at least one 4-wheeler car in select areas of the city. The areas estimated by tracking traffic flow during peak hours (8am-11am and 5pm 8pm) on four days of the week.
The WTP of respondent was calculated using contingent valuation method by providing three scenarios for them to choose from. Different mean and median WTP values were estimated for the different income classes to avoid the tax from becoming regressive. For the six income categories starting at ‘Rs.0-75k’ till ‘Rs.6.51L+’ per month, the mean WTP ranged between Rs.50/- and Rs.73.78/- while the median ranged between Rs.40/- and Rs.75/-. The respondents were also questioned on their perception/attitude towards environmental and traffic problems in Bengaluru using Likert-scale questions. The metric Cronbach’s Alpha was used to assess the reliability and internal consistency of the statements that were presented. Reported values for both categories suggested that the indicators are a whole, reliable, according to research standards. Empirical analysis on the behavioural aspects that impact an individual’s decision to pay using Partial Least Squares (PLS) methodology on a Probit regression was also carried out. The PLS model was selected to understand how the interdependence of important independent variables like Age, Monthly Expenditure, Number of Cars, Fuel Expenditure, Usage of Public Transport, etc. can affect someone’s willingness to pay. Further, to put this policy into perspective for Bengaluru, the author elaborates on initiatives that can introduced to ensure inclusivity and equity of the policy.
Keywords: Traffic congestion, Congestion pricing, Willingness To Pay, Traffic demand management policy, Probit regression.
