Almost all road infrastructure is treated as a public good and seen as a governmental obligation. But roads differ from other public goods such as national defense in both non-rivalry and non-exclusiveness features. Moreover, financing construction and maintenance of road infrastructure is challenging because of insufficient public revenues. The potential depletion of public financial resources due to fuel tax revenue reduction, advances in toll collection technologies, and the demand for better service requires a revolution in our approach to road infrastructure.;Privatization of transportation infrastructure has gained more attention in recent years. The trend of increasing private sector involvement in transportation service has significant financial and social consequences in road networks.;Using three different case studies, this research analyzes the effects of privatization and social cost pricing on urban networks. The first two case studies, a small network and city of Fresno's network, analyze different privatization strategies and the required regulations to improve social welfare. The last case study, London congestion charge zone, examines a modified congestion pricing scheme that includes the rent of the lands occupied by roads.;The first case study explores the effects of different privatization strategies on a simple hypothetical network with two modes of transportation, private cars and buses. The results from our test network show that in some cases, a monopoly ownership performs better than an oligopoly one and privatizing arterials (secondary roads) besides freeways (primary roads) can lead to lower total costs than privatizing only freeways. This study provides the foundation for more large scale exploration and also sets up the basic model for the second case study.;The second case study investigates the effects of a specific type of privatization (a concession model) on a road network of the city of Fresno in California. This case study uses the existing transportation planning model to examine the effects of different privatization strategies and social cost pricing on system performance measures such as total travel time and vehicle miles traveled (VMT). The results show that although unlimited pricing can even worsen the system performance (contrary to the first case study's results), limited pricing can raise enormous profits and also improve system performance.;The third case study suggests a modified social cost pricing on London congestion zone area, arguing that typically for public roads, some social costs are being ignored. For instance, the opportunity cost of having roads in place should include the forgone rents for land occupied by roads. For geographic regions where land is valuable, these ignored social costs may have significant impacts on the externalities associated with driving. The results prove that the impact of taking the rents into account is significant for social optimal pricing. Also, the inclusion of the rents can substantially increase the benefits from optimal charging and subsequently affect benefit/cost analysis.
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