Tolls, Exchange Rates, and Northbound International Bridge Traffic from Mexico

Although there have been a small number of empirical studies that analyze northbound border crossings between Mexico and the United States, very few examine the potential impacts of both tolls and exchange rates on the various traffic categories. This effort attempts to partially fill that gap in the applied economics literature by modeling northbound traffic flows at one of the largest regional economies along the border. Results indicate that business cycle fluctuations, variations in the real exchange rate, and changes in real toll tariffs all influence cross border traffic volumes. Tolls on northbound traffic into the United States are assessed by Mexico. The results also indicate that tolls can provide a reliable revenue stream for international bridge infrastructure finance in Mexico.