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Inefficiencies in regional commuting policy

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  • Toon VANDYCK
  • Stef PROOST

Abstract

This paper discusses investments in transport infrastructure and incentives for commuting taxes in a multiregional setting. We study the horizontal and vertical interactions between governments. We identify incentives for strategic and tax exporting behavior that might lead to underinvestment in transport infrastructure. Furthermore, we show that the intensity of the strategic behavior is affected by geographic firm ownership structure, the number of labor-supplying regions and the revenue-sharing mechanism in the federation. A numerical example applies the insights on commuting in Belgium.

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Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces11.18.

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Date of creation: Aug 2011
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Handle: RePEc:ete:ceswps:ces11.18

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  1. Parry, Ian W H & Bento, Antonio, 2001. " Revenue Recycling and the Welfare Effects of Road Pricing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(4), pages 645-71, December.
  2. Verhoef Erik T., 1997. "Externalities," Serie Research Memoranda 0031, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  3. De Borger Bruno & Dunkerley Fay & Proost Stef, 2006. "Strategic investment and pricing decisions in a congested transport corridor," Energy, Transport and Environment Working Papers Series ete0602, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
  4. Rainald Borck & Matthias Wrede, 2007. "Commuting Subsidies with two Transport Modes," CESifo Working Paper Series 1972, CESifo Group Munich.
  5. Bruno De Borger & Stef Proost & Kurt Van Dender, 2003. "Congestion and tax competition in a parallel network," Energy, Transport and Environment Working Papers Series ete0309, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
  6. Borck, Rainald & Wrede, Matthias, 2009. "Subsidies for intracity and intercity commuting," Journal of Urban Economics, Elsevier, vol. 66(1), pages 25-32, July.
  7. Bruno de Borger & Stef Proost, 2004. "Vertical and horizontal tax competition in the transport sector," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(4), pages 45-64.
  8. Wrede, Matthias, 2001. "Should Commuting Expenses Be Tax Deductible? A Welfare Analysis," Journal of Urban Economics, Elsevier, vol. 49(1), pages 80-99, January.
  9. Erik T. Verhoef & Peter Nijkamp, 2003. "Externalities in the Urban Economy," Tinbergen Institute Discussion Papers 03-078/3, Tinbergen Institute.
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