Affordable Access

Transforming payment choices by doubling fees on the Illinois Tollway

Authors

Abstract

On January 1, 2005, Illinois doubled the highway toll for travelers paying with cash, but kept the price unchanged for those paying electronically. This paper combines a theoretical model of payment choice with empirical analysis based on this rare natural experiment of differential pricing depending on the method of payment: cash versus electronic payment. An actual response to a price change allows the authors to estimate the sensitivity of consumer payment demand to prices.

There are no comments yet on this publication. Be the first to share your thoughts.