The Dutch Rail System’s Strange Peak-Load Pricing

Freakonomics Blog (Daniel Hamermesh) writes: The Dutch Rail System’s Strange Peak-Load Pricing: ""

I bought a round-trip ticket for a short train trip in the Netherlands, paying full price. Later I asked a colleague if there are discounts of any kind. Yes, she said, as long as you travel after 9 a.m. I assume this illustrates peak-load pricing, so I asked about traveling in the evening rush hour. It turns out the discount is good any time after 9 a.m.—there is no peak-load pricing for evening rush.

I know of no U.S. transit system that has peak-load pricing only in the a.m. Is this because our evening rush hours are more compact than in Europe? My colleague suggests that this is one more manifestation of the long and regular hours worked by most Americans, as compared to Europeans whose workdays often end at 3:30 or 4 p.m. It’s hard to think of another explanation. Despite these differences, the Dutch rail system will shortly be changing this, disallowing the discount between 5 p.m. and 7 p.m.

I assume this is an efficiency measure, since most trips are round, you only need to do the increase on relatively inelastic work trips once per day to have an all day effect. Sort of like tolling in only one direction. But there may be other explanations as noted in the comments.

David Levinson

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This page contains a single entry by David Levinson published on May 9, 2011 9:45 AM.

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