Second-best congestion pricing schemes in the monocentric city
AbstractThis 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 âby designâ (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. *Affiliated to the Tinbergen Institute, Roetersstraat 31, 1018 WB Amsterdam. Key words: Traffic congestion, second-best pricing, urban structure, spatial general equilibrium JEL codes: R41, R48, D62
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Urban Economics.
Volume (Year): 58 (2005)
Issue (Month): 3 (November)
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Web page: http://www.elsevier.com/locate/inca/622905
Other versions of this item:
- Erik T. Verhoef, 2004. "Second-best Congestion Pricing Schemes in the Monocentric City," Tinbergen Institute Discussion Papers 04-110/3, Tinbergen Institute.
- Erik Verhoef, 2004. "Second-best Congestion Pricing Schemes in the Monocentric City," ERSA conference papers ersa04p408, European Regional Science Association.
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
- D62 - Microeconomics - - Welfare Economics - - - Externalities
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