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Congestion Tolling with Agglomeration Externalities

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  • Richard Arnott

    ()
    (Boston College)

Abstract

Consider an urban economy with two types of externalities, negative traffic congestion externalities and positive agglomeration externalities deriving from non-market interaction. Suppose that urban travel can be tolled, that non-market interaction cannot be subsidized, and that non-market interaction is stimulated by a reduction in travel costs. Then the optimal toll is below the congestion externality cost. This paper explores this line of reasoning.

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Bibliographic Info

Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 660.

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Length: 34 pages
Date of creation: 26 Mar 2007
Date of revision:
Handle: RePEc:boc:bocoec:660

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References

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  3. Erik T. Verhoef, 2000. "Second-Best Congestion Pricing in General Networks - Algorithms for Finding Second-Best Optimal Toll Levels and Toll Points," Tinbergen Institute Discussion Papers 00-084/3, Tinbergen Institute.
  4. Arnott, Richard J., 1979. "Unpriced transport congestion," Journal of Economic Theory, Elsevier, vol. 21(2), pages 294-316, October.
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  18. Richard Arnott & An Yan, 2000. "The Two-Mode Problem: Second-Best Pricing and Capacity," Boston College Working Papers in Economics 474, Boston College Department of Economics.
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  20. Richard Arnott & Tilmann Rave & Ronnie Schöb, 2005. "Alleviating Urban Traffic Congestion," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012197, December.
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  26. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
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Citations

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Cited by:
  1. Giovanni Russo & Jos Ommeren & Piet Rietveld, 2012. "The university workers’ willingness to pay for commuting," Transportation, Springer, vol. 39(6), pages 1121-1132, November.
  2. Viard, Brian & Fu, Shihe, 2011. "The effect of Beijing’s driving restrictions on pollution and economic activity," MPRA Paper 33009, University Library of Munich, Germany.
  3. Rainald Borck & Matthias Wrede, 2008. "Subsidies for Intracity and Intercity Commuting," CESifo Working Paper Series 2321, CESifo Group Munich.
  4. Rhee, Hyok-Joo & Yu, Sanggyun & Hirte, Georg, 2014. "Zoning in cities with traffic congestion and agglomeration economies," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 82-93.
  5. Yoshitsugu Kanemoto, 2012. "Second-Best Cost-Benefit Analysis in Monopolistic Competition Models of Urban Agglomeration," GRIPS Discussion Papers 11-21, National Graduate Institute for Policy Studies.
  6. Stefanie Peer & Erik T. Verhoef, 2013. "Equilibrium at a Bottleneck when Long-Run and Short-Run Scheduling Preferences diverge," Tinbergen Institute Discussion Papers 13-028/VIII, Tinbergen Institute.
  7. Jeffrey C. Brinkman, 2013. "Congestion, agglomeration, and the structure of cities," Working Papers 13-25, Federal Reserve Bank of Philadelphia.
  8. Mogens Fosgerau & Kenneth Small, 2013. "Endogenous Scheduling Preferences and Congestion," Working Papers 131403, University of California-Irvine, Department of Economics, revised May 2014.
  9. Mogens Fosgerau & André De Palma & Anders Karlstrom & Kenneth A. Small, 2012. "Trip timing and scheduling preferences," Working Papers hal-00742267, HAL.
  10. Yuval Kantor & Piet Rietveld & Jos van Ommeren, 2013. "Towards a General Theory of Mixed Zones: The Role of Congestion," Tinbergen Institute Discussion Papers 13-084/VIII, Tinbergen Institute.
  11. Tsekeris, Theodore & Geroliminis, Nikolas, 2013. "City size, network structure and traffic congestion," Journal of Urban Economics, Elsevier, vol. 76(C), pages 1-14.
  12. repec:wyi:wpaper:002039 is not listed on IDEAS
  13. repec:dgr:uvatin:2010073 is not listed on IDEAS
  14. Yoshitsugu Kanemoto, 2013. "Pitfalls in estimating “wider economic benefits” of transportation projects," GRIPS Discussion Papers 13-20, National Graduate Institute for Policy Studies.
  15. Zheng, Nan & Waraich, Rashid A. & Axhausen, Kay W. & Geroliminis, Nikolas, 2012. "A dynamic cordon pricing scheme combining the Macroscopic Fundamental Diagram and an agent-based traffic model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(8), pages 1291-1303.
  16. Harrington, Winston & Safirova, Elena & Coleman, Conrad & Houde, Sebastien & Finkel, Adam M., 2014. "Distributional Consequences of Public Policies: An Example from the Management of Urban Vehicular Travel Abstract: This paper uses a spatially disaggregated computable general equilibrium model of a l," Discussion Papers dp-14-04, Resources For the Future.

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