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Subsidies for Intracity and Intercity Commuting

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  • Rainald Borck
  • Matthias Wrede

Abstract

This paper analyzes subsidies for intracity and intercity commuting in an urban economics framework with two cities and agglomeration externalities, where workers may commute within and between cities. First, commuting subsidies serve to internalize agglomeration externalities: Intracity commuting subsidies give incentives to move to the larger city and intercity commuting subsidies make residents of the periphery commute to the core. Second, if agglomeration rents are locally captured, commuting subsidies act as a welfare enhancing transfer from the core to the periphery.

Suggested Citation

  • Rainald Borck & Matthias Wrede, 2008. "Subsidies for Intracity and Intercity Commuting," CESifo Working Paper Series 2321, CESifo.
    • Handle: RePEc:ces:ceswps:_2321
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    References listed on IDEAS

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    More about this item

    Keywords

    commuting subsidies; agglomeration externalities; intercity and intracity commuting;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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