The concept of congestion pricing first appeared in the economics literature more than 60 years ago in an article written by William Vickrey, a Columbia University economics professor and future Nobel laureate. Yet traction for the concept has proven elusive.

In January, New York City became the first city in the U.S. to implement it.

The basic idea is straightforward. My decision to commute on the roadways during peak periods delays other commuters because it reduces average speeds. New Yorkers lose an average of 117 hours annually sitting in traffic.

Suppose that I am one of 1 million commuters. If my decision to commute increases the commuting time for the other commuters by 1/1000 of a second, and the value of their time is $32 per hour, then I am responsible for imposing a marginal congestion cost on all the other commuters of $8.89. This example demonstrates the logic underlying the $9 congestion toll that most passenger vehicles pay when commuting into New York City during peak periods.

Congestion pricing is politically controversial, drawing criticism from politicians from both parties. But it is not economically controversial. Congestion is a classic example of a

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