Congestion charge in Gothenburg

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Background

In this chapter we will present the most relevant previous research within the field of this study. This will provide the reader with the most relevant knowledge concerning the study´s problem and purpose but also, act as the frame of reference as it is the bases of the theoretical framework presented in the next chapter The first section will give a brief introduction of the structure, design and purpose of the congestion charge in Gothenburg, followed by previous research regarding the overall aim of congestion charge and how it relates to consumer behavior, public acceptance and demographic factors. Finally, the problem and purpose will be presented and further clarified by delimitation.

 Congestion charge in Gothenburg

According to Trafikverket (2013a) Gothenburg has been experiencing some major growth over the last decades, with an increase of 180% in the commuting traffic in and out the city and an increase in public transport by 20% (Trafikverket, 2012b). Furthermore, it is argued that the current road and rail network is not efficient enough to meet the increasing traffic demand, thus will result in future capacity constrain. For the reasons mentioned above a congestion charge system was instated on January 1th, 2013 by Gothenburg’s municipal board (Transportstyrelsen, 2013a). The motives behind the implementation of congestion charge are; decrease pollution, increase efficiency of the transport systems and reduce traffic congestion. It will also co-finance “The West Swedish Agreement” which is a major infrastructure investment with the goal of making the public transport system more efficient by constructing new bus lanes, walk/ bicycle lanes and better platforms for trains (Trafikverket, 2012c). Furthermore two new tunnels and one bridge are also included in the package (Transportstyrelsen, 2012b). The total cost of this package has roughly been estimated to be 34 billion SEK (Trafikverket, 2012d).
The Gothenburg congestion charge model is levied on all Swedish registered cars that enter and exit the city with the exception of foreign registered cars, emergency vehicles and buses (Transportstyrelsen, 2013a). There are 36 control perimeters in Gothenburg (see appendix 3).
The control perimeters are placed along E6 north, that has been placed there to reduce the spillover effects from congestion i.e. to protect the surrounding neighborhood from unwanted through traffic from E6 (point 17-21, see appendix 3) (Transportstyrelsen, 2012e). There are no charges during weekends, public holidays or in the month of July. The rush hours in Gothenburg are in the morning and in the afternoon and the charges are therefore set accordingly where the congestion charge is set to 8 SEK for passage between the hours, 6:00 to 6:29; 8:30 to 14:59 and 18:00 to 18:29. A charge of 13 SEK will be charged at; 6:30 to 6:59; 8:00 to 8:29, 15:00 to 15:29 and 17:00 to 17:59. Finally, a tax of 18 SEK is charged for passage at. 7:00 to 7:59 and 15:30 to 16:59 (peak hours). However, the max amount that can be charged during a day is SEK 60/car and the charge is set by the multi passage rule which means the road user can pass any number of control perimeters for a given period of 60 minutes with one payment. (Transportstyrelsen 2012d).

 Prior research

The literature of congestion charge belongs to the field of transport economics, road engineering and transport policy. There is no universally applicable congestion charge model or approach that suits every large city as all cities are unique in some way. However, in general, there are three clear goals of congestion charge that all cities share, namely; to collect revenue, to reduce traffic congestion and to invest in infrastructural projects (Niskanen & Nash, 2008; Eliasson, 2010).

Congestion charge effect on behavior

An adjustment in traffic behavior due to traffic congestion charge takes place when the road user change mode of transportation, from car to public transport, and/or time and destination of the trip to evade charges (Karlström & Franklin, 2008; Keuleers, Thorpe, Timmermans & Wets, 2005; Keuleers et al. 2005). Hu and Saleh´s (2005) study investigated the likely effect of a preliminary congestion charge in Edinburg and suggested that a change in the driver’s behavior would occur, as they would drive less or change their destination after the introduction of the congestion charge. However, it has also been shown in several cases that these changes in travel pattern is part of the adaption process and could be seen as a short-term strategy for dealing with the congestion charge and the new circumstances, and that the behavioral change will diminish over time (Keuleers et al. 2005; Bonsall et al. 2006). Schmöcker et al. (2005) found a change in the shopping frequency post the implementation of a congestion charge, where an association to public acceptance could be noted, as people with a low level of acceptance changed their behavior to a higher extent than those who supported it. Results from AKTA road pricing experiment in Copenhagen also found an association between acceptance and behavioral change. It was argued that people change their behavior according to their acceptance level (Gehlert, Kramer, Nielsen, Bernhard & Schlag, 2011) However, there is conflicting evidence of the actual effect acceptance has on behavioral change. Cools, Brijs, Tormans, Moons, Janssens and Wets (2011) did not find any empirical evidence of an association between the two. As previously stated, to gain further knowledge of this association between public acceptance and behavior is a main objective of this study.

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Public acceptance

It has been widely argued in the congestion charge theory that public acceptance is a determining success factor in the implementation of a congestion charge system, as without public acceptance a permanent implementation is impossible (OECD/ITF, 2010). There are several aspects in achieving a high acceptance, and most of the congestion charge theories agree upon the most critical, namely, information, perceived need of congestion charge, perceived improvements, tax revenue purpose and scheme system design. The level of information is important to gain public acceptance and the information should explain the motives of the implementation i.e. the intent to solve a traffic problem; finance a project, it should also contain practical information of how it works and when it will be activated (Odeck & Kjerkreit, 2010). The perceived need of congestion charge due to a pressing traffic problem is also crucial, as people will only have a positive attitude towards paying for their mobility if there is a massive congestion (OECD/ITF, 2010). This relates to the element of perceived improvement, if the public do not see any improvements after the implementation, their willingness to keep paying will reduce significantly as the acceptance diminishes (OECD/ITF, 2010).
It has been suggested that how the government manages to influence the public perception of congestion charge is of vital concern for its success (OECD/ITF, 2010). It is likely that if a large proportion of the general population is disturbed by traffic congestion and are experiencing that the congestion charge has a positive effect on the problem the level of acceptance will increase. The tax revenue purpose is also a pressing acceptance concern, as the aim of congestion charge is to increase the efficiency by investing in infrastructure (Niskanen & Nash, 2008; OECD/ITF, 2010). This implies that investment in additional road capacity; public transport, bus lanes and other means of infrastructure that the public find beneficial, could increase the public acceptance level (Button, 2010). Furthermore, Schuitema and Steg ´s (2008) findings indicated that the highest acceptance is reached when the tax purpose is used to decrease car and road related taxes, followed by investment in public transport where other infrastructural project such as roads and tunnels was the least effective in this manner. Finally, scheme system design is last the critical factor and it is mainly concerned with the pricing and positioning of the control perimeters (Rentziou, Milioti, Gkritza, & Karlaftis 2011).
When a congestion charge system is planned and structured it is crucial to select the right area to charge. The boarders should be set to reduce the most congested areas to capture a large segment of the commuter traffic, without affecting surrounding areas that are less congested such as delivery traffic or shopping traffic, particularly not in a way that could affect outside stakeholders such as, retail store owners. It is also important to avoid a positioning of the perimeters that could surround or trap a certain area or to place them in unpolluted zones. If this is impossible exceptions can be made by allowing certain inhabitants to travel free of charge due to their unfortunate positioning of the perimeters or to make an exception for a route through the less polluted areas (OECD/ITF, 2010).

Demographic factors

Demographic factors such as, age, gender and income may be of importance for change in consumer behavior and public acceptance of the congestion charge (Jaensirisak et al. 2005; Ben-Elia & Ettema 2011; Avineri, et al., 2010; Eliasson & Johnson 2011). Some have argued that congestion charge is unfair among road users “since the same charges are levied on car use regardless of the incomes of motorists” (Richardson, 1974, p.82). It has also been argued that any kind of pricing will yield different consumption patterns for different income-groups tied to their amount of income and their ability to spend that income (Button, 2010). It is also argued by Richardson (1974) that people with less economical margins in terms of income will be more affected by the congestion charge thus suffer to a greater extent. Small, (1983) argue that congestion charge is regressive because people with higher income also have a higher value of their time, and therefore consider the charge to be worth the value charged. Hence, there might be a difference in behavior and/or acceptance with regard to income. Further relevant demographic factors was noted in a Ben-Elia and Ettema’s (2011) study which concluded that the congestion charge had a more severe impact on men, as they adjusted their travel behavior to a greater extent. The same study indicated that this could be based on the gender roles and that the women’s tasks and household duties required them to drive during specific hours, which made them less sensible to the charge. Jaensirisak et al. (2005) also acknowledge the importance of demographic factors, as their findings indicated that the level of acceptance increase among people who are higher educated. This association was also found at an aggregated level in Eliasson and Johnson´s (2011) study were place of residence was pointed out to be of interest, where people in the suburb tended to have a lower level acceptance than people who live in the central city. Age is also pointed out as an associate factor towards acceptance and behavior, where older people are seen as less likely to have a positive attitude compared to younger age groups, and are also more likely to change their behavior (Avineri, et al. 2010). The theory is based on the complex mobility need of older people as well as they generally have a lower income (Avineri, et al. 2010).

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 Congestion charge impact on retail business performance

Several studies have been carried out to investigate the possible impact the congestion charge have on retail business performance, but there is little or no evidence of an actual relation. Daunfeldts et al (2011) study of Stockholm could not show any evidence of an impact. However, they speculated in the possibility of an imposed cost on the retail business as result of the behavioral change caused by the congestion charge. The argument was that the behavioral change would cause people to visit during evenings and weekends when the congestion charge was deactivated. However this is also a time when the general costs of staff are higher and thereby may affect the overall business performance. Transport for London´s (2008) findings showed that after the introduction of the congestion charge in London, the frequency of travels in or out from the western zone (see appendix 3) during charging hours dropped by more than 10 %. This led to a discussion where it was speculated that those travelling for shopping and leisure purposes, changed the travelling pattern with regard to destination and time to avoid the charging hours. It was also argued that it was less likely to use the car for the purpose of shopping (Transport for London, 2008; Quddus, Carmel & Bell, 2005). Daunfeldts et al (2009) study also found indication of a difference in the impact on performance between retail stores, where stores located near the congestion charge where more likely to be affected higher extent than the stores located in the city center. This is in line with Whitehead´s (2002) argument, which also recognized that the central city might be less affected than other areas; however, Whitehead´s (2002) argument was also related to surrounding investments and public transportation. This was also indicated to be of importance in Schmöcker et al. (2005) study as investment and public transport could lead to one area becoming more attractive than others. Another observation was made in Quddus, et al. (2005) study where it was suggested that the retail stores selling larger bulky items could be more affected than other retail stores. This could be due to the high proportion of car-born customers and the inconvenience of traveling with large items on the public transport.

Current debate

A survey conducted by Sifo in 2010 showed that 57% of the people in Gothenburg did not agree to the implantation of the congestion charge, which indicates a generally low level of acceptance (TT, 2012). In December 2012, approximately 15% of Gothenburg’s inhabitants signed up for a referendum regarding the congestion charge which exceeds the legal margin of 10% (TT, 2012). It was also revealed that costs of the West Swedish Agreement was underestimated and have been strongly criticized by the national audit (Boisen, 2013). Claes Norgren from the national audit stated that the actual cost for the West Swedish Agreement package will be closer to 55 billion SEK then the initial estimated amount of 35 billion SEK (Pavlica, 2012). It should be noted that the West Swedish Agreement is an infrastructural project which was regarded as the least effective foundation in gaining acceptance in Schuitema & Steg ´s (2008) previous research.
In September 2012 prior to the introduction of the congestion charge in Gothenburg, business owners located close to E6 were afraid of the potential effect the congestion charge could have on their businesses (Christell, 2013a). The stores in Bäckebol are located just a couple of hundred meters from the control perimeters (point 17 & 18, see appendix 3). Many of the customers to this center are car-borne and have to pay congestion charge during the active hours and the stores claims to have been affected. According to Bäckebol Centrum´s CEO Gunnar Berg the implementation has been a disaster, as stores claims to lose customers during the hours when the congestion charge is active (Fredriksson, 2013). Moreover, 31 companies in the area of Bäckebol have asked for a reassessment of the placement of the control perimeters along E6 North. They argue the placement of these perimeters impose a disadvantage for their business as their placement encircles them. Furthermore, they argue that the placement leads to twisted market competition based on their location in relation to other centers (Fredriksson, 2013). However, no evidence has been presented to support that a decline in customers has been related to the introduction of the congestion charge. The placement of the control perimeters in Gothenburg is not in agreement with the OECD/ITF´s (2010) recommendations. It can also be added that the control perimeter placement differs in design compared to Stockholm and London (see appendix 3).

1. Introduction
1.1. Definitions
2. Background
2.1. Congestion charge in Gothenburg
2.2. Prior research
2.3. Problem
2.4. Purpose
2.5. Delimitation
– 3. Theoretical Framework
3.1. Consumer behavior
3.2. Public acceptance
3.3. Demographic factors
– 4. Methodology & Methods
4.1 Methodology
4.2 Method
4.3 Practical issues in the process
– 5. Empirical findings
5.1 The interviews
5.2. Innerstaden AB
5.3. IKEA Bäckebol
5.4. Questionnaire results
– 6. Analysis & Discussion
6.1. Consumer behavior
6.2. Public acceptance
6.3. Demographic factors
6.4. Possible impact on retail business performance
6.5. Recommendations for further research
6.6. Limitations of the study
6.7. Conclusion
7. Reflections of the writing process
– References
– Appendices
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