Quantifying the phantom jam externality: the case of an Autobahn section in Germany

Abstract

If not restricted by tolls, private decisions to drive on a highway result in inefficiently high usage which leads to traffic jams. When traffic demand is high, traffic jams can occur simply because of the interaction of vehicle drivers on the road, a phenomenon called phantom jam. The probability of phantom jams occurring increases with traffic flow. Unpriced externalities lead to inefficiently high road usage. We offer a method for quantifying traffic jam externalities and identifying and isolating the phantom jam externality. We examine the method by applying it to a specific highway section in Germany. The maximal congestion externality for the analyzed highway section is about 38 cents per vehicle and kilometer. Congestion charges that are calculated ignoring phantom jam externalities, can only internalize two-thirds of the true externality.