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Concentration Versus Re-Matching? Evidence About the Locational Effects of Commuting Costs

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  • Michael J. Boehm
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    Abstract

    Using administrative employer-employee data from Germany, I exploit two reductions of tax breaks for commuting in 2003/4 and 2006/7 to estimate commuting costs' effect on the decision to switch job and move house. Standard theory predicts that higher commuting costs should lead to increased concentration in urban centers. However, I find that re-matching of existing jobs and houses to reduce commuting distances is much more prevalent in the data. With these estimates I calculate the effect of a complete abolition of the tax breaks on overall travel distance, fuel usage, greenhouse gas emissions, the tax base, and the de-population of the countryside.

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    File URL: http://cep.lse.ac.uk/pubs/download/dp1207.pdf
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    Bibliographic Info

    Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1207.

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    Date of creation: May 2013
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    Handle: RePEc:cep:cepdps:dp1207

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    Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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    Keywords: Work/residence location choice; commuting costs; environmental effects of tax policy; employer-employee data;

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    10. Schulze, Sven, 2009. "Einige Beobachtungen zum Pendlerverhalten in Deutschland," HWWI Policy Papers 1-19, Hamburg Institute of International Economics (HWWI).
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    12. Jutta Kloas & Hartmut Kuhfeld, 2003. "Entfernungspauschale: Bezieher hoher Einkommen begünstigt: aktuelle Ergebnisse zum Verkehrsverhalten privater Haushalte," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 70(42), pages 623-629.
    13. Shanjun Li & Christopher Timmins & Roger H. von Haefen, 2009. "How Do Gasoline Prices Affect Fleet Fuel Economy?," American Economic Journal: Economic Policy, American Economic Association, American Economic Association, vol. 1(2), pages 113-37, August.
    14. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 90(6), pages 1257-78, December.
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