AN INDEXATION APPROACH TO MEASURING CONGESTION EXTERNALITIES AND OPTIMAL ADMISSION FEES.

Rationing the use of fixed capacity facilities subject to congestion costs by using fees Is complicated in practice by the difficulty of estimating quality-adjusted demand schedules for the facility. Previous approaches to measuring congestion costs have met with limited success. An alternative methodology based on indexation techniques is presented and then applied to a popular urban lake in Arizona. It is concluded that estimating quality-adjusted user fees through the use of indexation techniques has several advantages over earlier approaches.

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