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London-type congestion tax with revenue-recycling

Author

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  • Yukihiro Kidokoro

    (Center of Spatial Information Science, University of Tokyo)

Abstract

Road pricing in London attracts a great deal of interest. A challenging aspect of the London scheme is that congestion tax revenue is used to upgrade public transit networks. Although Parry and Bento (2001) show that the total social surplus would increase if congestion tax revenues are used to cut labor taxes, political difficulties exist in implementing revenue-recycling between congestion taxes and labor taxes. Given such political difficulties, the London scheme seems to be very attractive. In this paper, we develop a model that can expressly deal with the London-type revenue-recycling between congestion tax and investment in public transit, and analyze its effects.

Suggested Citation

  • Yukihiro Kidokoro, 2005. "London-type congestion tax with revenue-recycling," Economics Bulletin, AccessEcon, vol. 18(1), pages 1-6.
    • Handle: RePEc:ebl:ecbull:eb-05r40001
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    References listed on IDEAS

    as
    1. Ian W. H. Parry & Kenneth A. Small, 2005. "Does Britain or the United States Have the Right Gasoline Tax?," American Economic Review, American Economic Association, vol. 95(4), pages 1276-1289, September.
    2. Verhoef, Erik & Nijkamp, Peter & Rietveld, Piet, 1996. "Second-Best Congestion Pricing: The Case of an Untolled Alternative," Journal of Urban Economics, Elsevier, vol. 40(3), pages 279-302, November.
    3. Van Dender, Kurt, 2004. "Pricing transport networks with fixed residential location," Regional Science and Urban Economics, Elsevier, vol. 34(3), pages 289-307, May.
    4. 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 645-671, December.
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    Cited by:

    1. François Mirabel & Mathias Reymond, 2011. "The urban toll revenue recycling : what is the optimal share distributed towards mass transit system?," Working Papers hal-01830227, HAL.
    2. Kidokoro, Yukihiro, 2010. "Revenue recycling within transport networks," Journal of Urban Economics, Elsevier, vol. 68(1), pages 46-55, July.
    3. Mirabel, François & Reymond, Mathias, 2011. "Bottleneck congestion pricing and modal split: Redistribution of toll revenue," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(1), pages 18-30, January.

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    More about this item

    Keywords

    congestion tax;

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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