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Roads, Prices and Shortages: A Gasoline Parable
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Can pricing roads really help reduce congestion? One way to answer this question is to ask if not pricing roads causes congestion. This essay by Michael Manville makes that case, and does so by demonstrating the general principle that when goods are underpriced, shortages result, and congestion is essentially a shortage of road space. People react and adjust in many ways to shortages, but accurate pricing is the only reliable way to end a shortage caused by mispricing.
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