Do Commuters Free-ride? Estimating the Impacts of Interjurisdictional Commuting on Local Public Goods Expenditures
AbstractIn an era of political pressure to reduce taxes while increasing government services, local officials face difficult choices regarding what services to provide and how to finance them. One outcropping of this dilemma is that local citizens are expressing concerns that commuters use local government services but without paying for them. In response, some communities are considering taxing commuters. In this study we develop a basic model of congestion in a two-city model to examine commutersâ€™ effects on the optimal provision of public goods. The theoretical result suggests that taxing commuters at the difference in marginal congestion costs between the two cities can attain market equilibrium. We then specify an empirical model to determine this taxâ€™s size for Pennsylvania municipalities. The econometric results show differences in marginal congestion costs between workplace and resident communities, providing evidence that commuters may free-ride. The difference in marginal congestion costs, however, tends to be small, so we advise policymakers to be hesitant in adopting such a tax.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Mid-Continent Regional Science Association in its journal Journal of Regional Analysis and Policy.
Volume (Year): 33 (2003)
Issue (Month): 1 ()
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Edwards, John H. Y., 1990. "Congestion function specification and the "publicness" of local public goods," Journal of Urban Economics, Elsevier, vol. 27(1), pages 80-96, January.
- Wildasin, David E., 1987. "Theoretical analysis of local public economics," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 29, pages 1131-1178 Elsevier.
- Craig, Steven G., 1987. "The impact of congestion on local public good production," Journal of Public Economics, Elsevier, vol. 32(3), pages 331-353, April.
- Giovanni Russo & Federico Tedeschi & Aura Reggiani & Peter Nijkamp, 2011.
"Commuter Effects on Local Labour Markets: A German Modelling Study,"
Tinbergen Institute Discussion Papers
11-114/3, Tinbergen Institute.
- Giovanni Russo & Peter Nijkamp & Aura Reggiani & Federico Tedeschi, 2011. "Commuters' effect on local labour markets: A german case study," ERSA conference papers ersa10p1376, European Regional Science Association.
- Giovanni Russo & Federico Tedeschi & Aura Reggiani & Peter Nijkamp, 2011. "Commuter Effects on Local Labour Markets: A German Modelling Study," Tinbergen Institute Discussion Papers 11-114/3, Tinbergen Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.