Impact of Electronic Road Pricing (ERP) Changes on Transport Modal Choice

30 Pages Posted: 9 Aug 2015 Last revised: 7 May 2018

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Kang Mo Koo

Deakin University-Department of Finance

Date Written: July 8, 2015


This paper analyzes the effect of congestion toll rate change on the change of commuters’ transport modal choice in Singapore’s context. Amongst several alternatives that commuters can choose when they face increase of congestion tax, this study specifically tests the impact on the modal change to public bus transportation. This study finds that commuters switch to public bus services by 12 per cent to 20 per cent in the morning hours and by approximately 10% in the evening after congestion tax increase in the affected gantry area compared to the non-affected area and time through difference-in-difference method. Also, we found that the increase in bus ridership has long-lived effect at least within two months. Time falsification found no significant modal change. Other confounding factors from macro-economic standpoint and service quality couldn’t explain the results as the modal change occurred in short period within specific area and time.

Keywords: Congestion Charge, Traffic Management, Electric Road Pricing (ERP), Transport Modal Choice

JEL Classification: D1, H2, R4, R5

Suggested Citation

Agarwal, Sumit and Koo, Kang Mo, Impact of Electronic Road Pricing (ERP) Changes on Transport Modal Choice (July 8, 2015). Regional Science and Urban Economics, Vol. 60, 2016. Available at SSRN: or

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
8118 9025 (Phone)


Kang Mo Koo (Contact Author)

Deakin University-Department of Finance ( email )

221 Burwood Highway
Burwood, Victoria

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