Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2004-10-04
Number: 04-110/3
Author-Name: Erik T. Verhoef
Author-Email: everhoef@feweb.vu.nl
Author-Workplace-Name: Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam
Title: Second-best Congestion Pricing Schemes in the Monocentric City
Abstract: Paper submission from Erik Verhoef (everhoef@econ.vu.nl)Discussion Paper Submission Form - STEP 1This discussion paper abstract is submitted by Erik Verhoef (everhoef@econ.vu.nl)Template-Type: ReDIF-Paper 1.0Series: Tinbergen Institute Discussion PapersCreation-Date: Number: Author-Name: Erik T VerhoefAuthor-Email: everhoef@econ.vu.nlAuthor-Workplace-Name: VUTitle: SECOND-BEST CONGESTION PRICING SCHEMES IN THE MONOCENTRIC CITYAbstract:This paper considers second-best congestion pricing in the monocentric city, with endogenous residential density and endogenous labour supply. A spatial general equilibrium model is developed that allows consideration of the three-way interactions between urban density, traffic congestion and labour supply. Congestion pricing schemes are analyzed that are second-best ‘by design’ (and not because distortions exist elsewhere in the spatial economy), like cordon charging and flat kilometre charges. Both for Cobb-Douglas utility and for CES utility, the analyses suggest that the relative welfare losses from second-best pricing, compared to first-best pricing, are surprisingly small.
Classification-JEL: R41; R48; D62
Keywords: Traffic congestion; second-best pricing; urban structure; spatial general equilibrium
File-Url: https://papers.tinbergen.nl/04110.pdf
File-Format: application/pdf
File-Size: 506264 bytes
Handle: RePEc:tin:wpaper:20040110