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Transport subsidies, system choice, and urban sprawl

  • Brueckner, Jan K.

This paper analyzes the effect of transport subsidies on the spatial expansion of cities, asking whether subsidies are a source of undesirable urban sprawl. While the cost-reducing effect of transport subsidies is offset by a higher general tax burden (which reduces the demand for space), the analysis shows that subsidies nevertheless lead to spatial expansion of cities. If the transport system exhibits constant returns to scale, the subsidies are inefficient, making the urban expansion they entail undesirable. The paper also studies transport ‘system choice.’ The city is portrayed as selecting its transport system from along a continuum of money-cost/time-cost choices.

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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 35 (2005)
Issue (Month): 6 (November)
Pages: 715-733

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Handle: RePEc:eee:regeco:v:35:y:2005:i:6:p:715-733
Contact details of provider: Web page: http://www.elsevier.com/locate/regec

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  1. Richard Voith & Joseph Gyourko, . "Capitalization of Federal Taxes, the Relative Price of Housing, and Urban Form: Density and Sorting Effects," Zell/Lurie Center Working Papers 366, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
  2. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455, 1.
  3. Brueckner, Jan & Selod, Harris, 2004. "The Political Economy of Urban Transport System Choice," CEPR Discussion Papers 4682, C.E.P.R. Discussion Papers.
  4. Wheaton, William C., 1974. "A comparative static analysis of urban spatial structure," Journal of Economic Theory, Elsevier, vol. 9(2), pages 223-237, October.
  5. Small, Kenneth A. & Gomez-Ibanez, Jose A., 1999. "Urban transportation," Handbook of Regional and Urban Economics, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 46, pages 1937-1999 Elsevier.
  6. Fujita, Masahisa & Ogawa, Hideaki, 1982. "Multiple equilibria and structural transition of non-monocentric urban configurations," Regional Science and Urban Economics, Elsevier, vol. 12(2), pages 161-196, May.
  7. Pines, David & Sadka, Efraim, 1986. "Comparative statics analysis of a fully closed city," Journal of Urban Economics, Elsevier, vol. 20(1), pages 1-20, July.
  8. Edward L. Glaeser & Matthew E. Kahn, 2003. "Sprawl and Urban Growth," Harvard Institute of Economic Research Working Papers 2004, Harvard - Institute of Economic Research.
  9. Sasaki, Komei, 1990. "Income class, modal choice, and urban spatial structure," Journal of Urban Economics, Elsevier, vol. 27(3), pages 322-343, May.
  10. 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.
  11. Arnott, Richard & Pines, David & Sadka, Efraim, 1986. "The effects of an equiproportional transport improvement in a fully-closed Monocentric City," Regional Science and Urban Economics, Elsevier, vol. 16(3), pages 387-406, August.
  12. Hartwick, John & Schweizer, Urs & Varaiya, Pravin, 1976. "Comparative statics of a residential economy with several classes," Journal of Economic Theory, Elsevier, vol. 13(3), pages 396-413, December.
  13. Thomas J. Nechyba & Randall P. Walsh, 2004. "Urban Sprawl," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 177-200, Fall.
  14. Brueckner, Jan K & Kim, Hyun-A, 2003. "Urban Sprawl and the Property Tax," International Tax and Public Finance, Springer, vol. 10(1), pages 5-23, January.
  15. Calfee, John & Winston, Clifford, 1998. "The value of automobile travel time: implications for congestion policy," Journal of Public Economics, Elsevier, vol. 69(1), pages 83-102, July.
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