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Commuting subsidies with two transport modes

  • Borck, Rainald
  • Wrede, Matthias

We study a simple model of commuting subsidies with two transport modes. City residents choose where to live and which mode to use. When all land is owned by city residents, one group gains from subsidies what the other loses. With absentee landownership, city residents as a group gain at the expense of landowners. Subsidies toward different modes have different effects, however. For instance, in one case, rich automobile drivers suffer from transit subsidies, while poor transit users may benefit from subsidies to automobiles.

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Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 63 (2008)
Issue (Month): 3 (May)
Pages: 841-848

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Handle: RePEc:eee:juecon:v:63:y:2008:i:3:p:841-848
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  1. de Bartolome, Charles A. M. & Ross, Stephen L., 2004. "Who's in charge of the central city? The conflict between efficiency and equity in the design of a metropolitan area," Journal of Urban Economics, Elsevier, vol. 56(3), pages 458-483, November.
  2. Brueckner, Jan & Selod, Harris, 2004. "The Political Economy of Urban Transport System Choice," CEPR Discussion Papers 4682, C.E.P.R. Discussion Papers.
  3. Arnott, Richard J & Stiglitz, Joseph E, 1981. "Aggregate Land Rents and Aggregate Transport Costs," Economic Journal, Royal Economic Society, vol. 91(362), pages 331-47, June.
  4. Jan K. Brueckner, 2003. "Transport Subsidies, System Choice, and Urban Sprawl," CESifo Working Paper Series 1090, CESifo Group Munich.
  5. Edward L. Glaeser & Matthew E. Kahn & Jordan Rappaport, 2000. "Why Do the Poor Live in Cities?," NBER Working Papers 7636, National Bureau of Economic Research, Inc.
  6. DeSalvo, Joseph S. & Huq, Mobinul, 1996. "Income, Residential Location, and Mode Choice," Journal of Urban Economics, Elsevier, vol. 40(1), pages 84-99, July.
  7. Rainald Borck & Matthias Wrede, 2004. "Political Economy of Commuting Subsidies," CESifo Working Paper Series 1339, CESifo Group Munich.
  8. Charles A. M. de Bartolome & Stephen L. Ross, 2002. "Who's in Charge in the Inner City? The Conflict Between Efficiency and Equity in the Design of a Metropolitan Area," Working papers 2002-03, University of Connecticut, Department of Economics.
  9. LeRoy, Stephen F. & Sonstelie, Jon, 1983. "Paradise lost and regained: Transportation innovation, income, and residential location," Journal of Urban Economics, Elsevier, vol. 13(1), pages 67-89, January.
  10. Sasaki, Komei, 1990. "Income class, modal choice, and urban spatial structure," Journal of Urban Economics, Elsevier, vol. 27(3), pages 322-343, May.
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