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Inefficiencies in regional commuting policy

  • Toon Vandyck
  • Stef Proost

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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File URL: http://hdl.handle.net/10.1111/
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Article provided by Wiley Blackwell in its journal Papers in Regional Science.

Volume (Year): 91 (2012)
Issue (Month): 3 (08)
Pages: 659-689

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Handle: RePEc:bla:presci:v:91:y:2012:i:3:p:659-689
Contact details of provider: Web page: http://www.blackwellpublishing.com/journal.asp?ref=1056-8190

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  1. 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.
  2. Borck, Rainald & Wrede, Matthias, 2009. "Subsidies for intracity and intercity commuting," Journal of Urban Economics, Elsevier, vol. 66(1), pages 25-32, July.
  3. Parry, Ian & Bento, Antonio, 1999. "Revenue Recycling and the Welfare Effects of Road Pricing," Discussion Papers dp-99-45, Resources For the Future.
  4. Rainald Borck & Matthias Wrede, 2007. "Commuting Subsidies with two Transport Modes," CESifo Working Paper Series 1972, CESifo Group Munich.
  5. De Borger Bruno & Stef Proost, 2004. "Vertical and horizontal tax competition in the transport sector," Energy, Transport and Environment Working Papers Series ete0412, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
  6. Wrede, Matthias, 2001. "Should Commuting Expenses Be Tax Deductible? A Welfare Analysis," Journal of Urban Economics, Elsevier, vol. 49(1), pages 80-99, January.
  7. DE BORGER, Bruno & PROOST, Stef & VAN DENDER, K., . "Congestion and tax competition in a parallel network," Working Papers 2004003, University of Antwerp, Faculty of Applied Economics.
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