A Tale of Two Tunnels: Economic Eects of Newly Imposed Tolls on Heavily Traveled Tunnel Venues in Virginia

Many studies have examined the reaction of drivers either to the opening of new roads, bridges and tunnels that assess tolls upon those who use them, or to driver reactions when existing tolls are increased. This study examines a much less common situation|the imposition of tolls on two existing, heavily traveled tunnel venues. Ordinarily, driver demand is price inelastic in tolled situations, but not so here. Initial driver reactions to the new tolls were strongly negative, though this response did dissipate somewhat over time. Critical issues here include the availability of viable substitute free travel venues; the amount of time lost by drivers when the substitutes are used; and, the disparate impact of the new tolls upon the cities adjacent to the tolled tunnels. These results may discipline policy-makers and investors who regard tolls as enticing solutions to their problems.