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Optimal Transportation Network in a Closed City under Residential and Absentee Land Ownerships

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  • Yuichiro Yoshida

    (National Graduate Institute for Policy Studies)

  • Abu Nur Rashed Ahmed

    (National Graduate Institute for Policy Studies)

Abstract

This paper investigates the optimality condition of transport network development in a closed city with residents’ and absentee land ownerships. We set up an urban land use model in which, taking prices and characteristics of transport network as given, households that are identical in their preferences and endowments maximize utility by choosing residential location, lot size, and travel modes. Social planner then optimizes with respect to the characteristics of transportation network so as to maximize the level of utility in the spatial equilibrium. The key findings of this paper include that under resident landlord case the general optimality condition of the transport network improvement is such that the marginal cost of improvement is equal to the marginal increase in the aggregated differential land rent evaluated at current level of land rent.

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Bibliographic Info

Paper provided by National Graduate Institute for Policy Studies in its series GRIPS Discussion Papers with number 12-23.

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Length: 17 pages
Date of creation: Mar 2013
Date of revision:
Handle: RePEc:ngi:dpaper:12-23

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  1. Kanemoto, Yoshitsugu, 1984. "Pricing and Investment Policies in a System of Competitive Commuter Railways," Review of Economic Studies, Wiley Blackwell, vol. 51(4), pages 665-81, October.
  2. Kanemoto, Yoshitsugu, 1977. "Cost-benefit analysis and the second best land use for transportation," Journal of Urban Economics, Elsevier, vol. 4(4), pages 483-503, October.
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