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Congestion pricing and long term urban form: Application to Paris region

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  • De Lara, Michel
  • de Palma, André
  • Kilani, Moez
  • Piperno, Serge

Abstract

We propose an efficient algorithm that solves urban equilibrium with traffic congestion. The procedure we propose is based on the monocentric model, but we illustrate how it can be used in the case of more than one business center. As a case study we focus on the region of Paris and discuss the impacts of road pricing on urban form. Among road pricing schemes, we consider the linear toll (proportional to traveled distance) and cordon toll (a toll paid once the driver crosses a given border). Both schemes are compared to the no toll case (actual situation) and to the first-best (where total costs in the city are minimized). The linear toll is equivalent to an increase in the vehicle operating cost. It performs well with respect to the first-best solution but, since it applies identically to all trips, it is not likely to be relevant in practice. By comparison to the no-toll situation, optimal congestion pricing reduces the radius of the city and the average travel distance by 34% and 15%, respectively.

Suggested Citation

  • De Lara, Michel & de Palma, André & Kilani, Moez & Piperno, Serge, 2013. "Congestion pricing and long term urban form: Application to Paris region," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 282-295.
  • Handle: RePEc:eee:regeco:v:43:y:2013:i:2:p:282-295
    DOI: 10.1016/j.regsciurbeco.2012.07.007
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    1. repec:kap:transp:v:45:y:2018:i:2:d:10.1007_s11116-016-9742-2 is not listed on IDEAS
    2. Zhang, Wenjia & Kockelman, Kara M., 2016. "Optimal policies in cities with congestion and agglomeration externalities: Congestion tolls, labor subsidies, and place-based strategies," Journal of Urban Economics, Elsevier, vol. 95(C), pages 64-86.
    3. de Palma, André & Lindsey, Robin & Monchambert, Guillaume, 2017. "The economics of crowding in rail transit," Journal of Urban Economics, Elsevier, vol. 101(C), pages 106-122.
    4. André De Palma & Robin Lindsey & Guillaume Monchambert, 2015. "The Economics of Crowding in Public Transport," Working Papers hal-01203310, HAL.
    5. repec:eee:retrec:v:62:y:2017:i:c:p:68-79 is not listed on IDEAS
    6. Antonio Russo & Bruno De Borger, 2015. "The Political Economy of Cordon Tolls," ERSA conference papers ersa15p907, European Regional Science Association.
    7. Agarwal, Sumit & Koo, Kang Mo & Sing, Tien Foo, 2015. "Impact of electronic road pricing on real estate prices in Singapore," Journal of Urban Economics, Elsevier, vol. 90(C), pages 50-59.
    8. Li, Zhi-Chun & Chen, Ya-Juan & Wang, Ya-Dong & Lam, William H.K. & Wong, S.C., 2013. "Optimal density of radial major roads in a two-dimensional monocentric city with endogenous residential distribution and housing prices," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 927-937.
    9. repec:eee:regeco:v:68:y:2018:i:c:p:160-171 is not listed on IDEAS
    10. repec:eee:transb:v:111:y:2018:i:c:p:244-265 is not listed on IDEAS
    11. André De Palma & Moez Kilani & Michel De Lara & Serge Piperno, 2011. "Cordon pricing in the Monocentric city model: Theory and application to Ile-de- France," Post-Print hal-00348437, HAL.
    12. repec:bla:presci:v:96:y:2017:i:1:p:163-190 is not listed on IDEAS
    13. Zhang, Wenjia & Kockelman, Kara M., 2016. "Congestion pricing effects on firm and household location choices in monocentric and polycentric cities," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 1-12.
    14. Georg Hirte & Stefan Tscharaktschiew, 2015. "Why not to choose the most convenient labor supply model? The impact of labor supply modeling on policy evaluation," ERSA conference papers ersa15p303, European Regional Science Association.
    15. Mahyar Amirgholy & Hojjat Rezaeestakhruie & Hossain Poorzahedy, 2015. "Multi-objective cordon price design to control long run adverse traffic effects in large urban areas," Netnomics, Springer, vol. 16(1), pages 1-52, August.
    16. Brueckner, Jan K., 2014. "Cordon tolling in a city with congested bridges," Economics of Transportation, Elsevier, vol. 3(4), pages 235-242.
    17. repec:eee:juecon:v:105:y:2018:i:c:p:133-148 is not listed on IDEAS
    18. Floater, Graham & Rode, Philipp & Friedel, Bruno & Robert, Alexis, 2014. "Steering urban growth: governance, policy and finance," LSE Research Online Documents on Economics 60776, London School of Economics and Political Science, LSE Library.
    19. André De Palma & Alexandre Guimard, 2014. "Urbanism, an overview," Working Papers hal-00969574, HAL.

    More about this item

    Keywords

    Monocentric model; Equilibrium computation; Transport pricing; Long-term impacts;

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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