Financial Engineering
E-ISSN: 2945-1140
Volume 3, 2025
Mathematical Modeling for Congestion Pricing Mechanism for Bahrain
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Abstract: This research focuses on mathematical modeling for the design of a congestion pricing system for the Diplomatic Area in Bahrain, which is an unconventional solution to reduce traffic congestion because it involves the price mechanism. The procedure started with a questionnaire to the public to find out the public acceptance and their opinion about the suggested system. Then, the required data was collected to calculate the congestion costs and the optimal toll using two strategies: first-best strategy, and second-best strategy. Based upon that, a comparative analysis of the strategies was conducted to evaluate their suitability for the zonal scheme, and the policy implications. The zonal pricing scheme was considered in the design of the system. It is concluded that the first-best strategy is more effective and suitable for the zonal scheme because it is based on stronger economic justification by defining the individual cost and the social cost. This aspect allows a comparison to be made for the situation before and after implementing the system in terms of the congestion costs. A recommended toll for the area is 0.4 BD per day, and the restricted period to be from 7:00 a.m. to 12:00 p.m. This research provides a valuable contribution to the implementation of congestion pricing systems by providing customized models for GCC countries where such measures are scarcely applied. Its methodology provides a pathway to implement such systems in their unique settings.
Keywords:
Traffic congestion, Bahrain, pricing strategies, mathematical modeling, traffic counts, Level of service
Pages: 421-433
DOI: 10.37394/232032.2025.3.36