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Efficiency vs equity: Conflicting objectives of congestion charges

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  • Kristoffersson, Ida
  • Engelson, Leonid
  • Börjesson, Maria

Abstract

This paper analyses the trade-off between equity and efficiency in the design of the Stockholm congestion charging systems. Comparing different designs for Stockholm, the paper shows that the most efficient system is the least equitable. Indeed, we show that moving towards a more efficient system design favours high-income-users most. The reason is the uneven distribution of workplaces and residential areas, combined with richer socio-economic groups living in areas with more workplaces. Hence, the conflict between efficiency and equity of this policy arises from the spatial mismatch of residential areas and locations of employment, and the spatial separation between low-income and high-income groups that characterise most cities. This paper shows that these spatial patterns have a large effect on the distribution effects of the congestion charges and that the system design can have a major impact on equity.

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  • Kristoffersson, Ida & Engelson, Leonid & Börjesson, Maria, 2017. "Efficiency vs equity: Conflicting objectives of congestion charges," Transport Policy, Elsevier, vol. 60(C), pages 99-107.
    • Handle: RePEc:eee:trapol:v:60:y:2017:i:c:p:99-107
    DOI: 10.1016/j.tranpol.2017.09.006
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    Cited by:

    1. Helmers, Viola & Frondel, Manuel & Sommer, Stephan, 2023. "On the Acceptance of Congestion Charges: Experimental Evidence for Six European Countries," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277706, Verein für Socialpolitik / German Economic Association.
    2. Andrea Baranzini & Stefano Carattini & Linda Tesauro, 2021. "Designing Effective and Acceptable Road Pricing Schemes: Evidence from the Geneva Congestion Charge," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(3), pages 417-482, July.
    3. Börjesson, Maria & Eliasson, Jonas & Rubensson, Isak, 2020. "Distributional effects of public transport subsidies," Journal of Transport Geography, Elsevier, vol. 84(C).
    4. Jenn, Alan, 2019. "Lessons Learned for Designing Programs to Charge for Road Use, Congestion, and Emissions," Institute of Transportation Studies, Working Paper Series qt9n8571hf, Institute of Transportation Studies, UC Davis.
    5. Novak, D.C. & Sullivan, J.F. & Sentoff, K. & Dowds, J., 2020. "A framework to guide strategic disinvestment in roadway infrastructure considering social vulnerability," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 436-451.
    6. Börjesson, Maria & Kristoffersson, Ida, 2018. "The Swedish congestion charges: Ten years on," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 35-51.
    7. Ortega, Alejandro & Vassallo, José Manuel & Pérez, Juan Ignacio, 2021. "Modelling some equality and social welfare impacts of road tolling under conditions of traffic uncertainty," Research in Transportation Economics, Elsevier, vol. 88(C).
    8. Minghui Zhang & Weiqi Xia, 2022. "Research on the Law of China’s Rural Land Institutional Changes: An Analytical Framework of Economic Efficiency and Distributive Equity," Land, MDPI, vol. 11(12), pages 1-15, December.

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    More about this item

    Keywords

    Congestion charging; Efficiency; Equity; Welfare effects; R41; R48;
    All these keywords.

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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