the concept of perceived cost has recently gained wide currency in transport planning, but the practical implications of misperceptions of travel cost are not so well known. this report illustrates the effect of differing levels of misperception of travel on the levels of the travel demand, on the magnitude and location of network traffic flows, and on the net social benefits derived from a fiscal traffic restraint policy. marginal social cost pricing is used as the basis of restraint policy for this report in view of its simplicity and its broad impact on flow and demand to ensure that the general conclusions are more widely relevant. two primary conclusions can be drawn from this example: (a) the difference between marginal and average cost levels when reflected by the behaviour of the traveller means that average costing with full and accurate user perception yields about half the net benefit obtained for a situation which is similar except that the travellers see only the marginal component of costs, and (b) the net benefit to be derived from fiscal restraint rises steeply with the degree of under-perception of costs displayed by the travellers before the restraint is applied. (a).

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