IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v162y2025icp396-405.html
   My bibliography  Save this article

Welfare costs of urban traffic through retail prices

Author

Listed:
  • Yilmazkuday, Hakan

Abstract

This paper investigates the welfare costs of urban traffic by considering its implications on consumer retail prices. Using retail price data for 40 goods and services from 70 cities (covering 47 countries) for multiple years, the estimation results suggest that the elasticity of retail prices with respect to the time spent in urban traffic is about 0.5. This elasticity is further connected to the welfare of consumers by using the implications of an economic model. The corresponding investigation shows that reducing the time spent in urban traffic by one minute improves consumer welfare by about 1.3% for the average city, with a range between 0.8% and 2.3% across cities. Several policy suggestions follow regarding how to reduce the time spent in urban traffic that would improve consumer welfare.

Suggested Citation

  • Yilmazkuday, Hakan, 2025. "Welfare costs of urban traffic through retail prices," Transport Policy, Elsevier, vol. 162(C), pages 396-405.
    • Handle: RePEc:eee:trapol:v:162:y:2025:i:c:p:396-405
    DOI: 10.1016/j.tranpol.2024.12.017
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X24003913
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tranpol.2024.12.017?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Demet Yilmazkuday & Hakan Yilmazkuday, 2017. "The role of direct flights in trade costs," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(2), pages 249-270, May.
    2. Ismir Mulalic & Jos N. Van Ommeren & Ninette Pilegaard, 2014. "Wages and Commuting: Quasi‐natural Experiments' Evidence from Firms that Relocate," Economic Journal, Royal Economic Society, vol. 124(579), pages 1086-1105, September.
    3. Ferdinando Monte & Stephen J. Redding & Esteban Rossi-Hansberg, 2018. "Commuting, Migration, and Local Employment Elasticities," American Economic Review, American Economic Association, vol. 108(12), pages 3855-3890, December.
    4. Ben-Elia, Eran & Ettema, Dick, 2011. "Rewarding rush-hour avoidance: A study of commuters' travel behavior," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(7), pages 567-582, August.
    5. Rouwendal, Jan, 1999. "Spatial job search and commuting distances," Regional Science and Urban Economics, Elsevier, vol. 29(4), pages 491-517, July.
    6. Crucini, Mario J. & Yilmazkuday, Hakan, 2014. "Understanding long-run price dispersion," Journal of Monetary Economics, Elsevier, vol. 66(C), pages 226-240.
    7. De Vos, Jonas, 2016. "Road pricing in a polycentric urban region: Analysing a pilot project in Belgium," Transport Policy, Elsevier, vol. 52(C), pages 134-142.
    8. Cristina Pronello & Valentina Rappazzo, 2014. "Road pricing: How people perceive a hypothetical introduction. The case of Lyon," Post-Print halshs-01084028, HAL.
    9. Tillema, Taede & Ben-Elia, Eran & Ettema, Dick & van Delden, Janet, 2013. "Charging versus rewarding: A comparison of road-pricing and rewarding peak avoidance in the Netherlands," Transport Policy, Elsevier, vol. 26(C), pages 4-14.
    10. Pronello, Cristina & Rappazzo, Valentina, 2014. "Road pricing: How people perceive a hypothetical introduction. The case of Lyon," Transport Policy, Elsevier, vol. 36(C), pages 192-205.
    11. Asplund, Disa & Pyddoke, Roger, 2021. "Optimal pricing of car use in a small city: A case study of Uppsala," Transport Policy, Elsevier, vol. 114(C), pages 88-103.
    12. Ramos, Raúl & Cantillo, Víctor & Arellana, Julián & Sarmiento, Iván, 2017. "From restricting the use of cars by license plate numbers to congestion charging: Analysis for Medellin, Colombia," Transport Policy, Elsevier, vol. 60(C), pages 119-130.
    13. Hensher, David A. & Li, Zheng, 2013. "Referendum voting in road pricing reform: A review of the evidence," Transport Policy, Elsevier, vol. 25(C), pages 186-197.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Krabbenborg, Lizet & Molin, Eric & Annema, Jan Anne & van Wee, Bert, 2020. "Public frames in the road pricing debate: A Q-methodology study," Transport Policy, Elsevier, vol. 93(C), pages 46-53.
    2. Dauth, Wolfgang & Haller, Peter, 2016. "The valuation of changes in commuting distances: an analysis using georeferenced data," IAB-Discussion Paper 201643, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Jennifer Roberts & Karl Taylor, 2017. "Intra-household commuting choices and local labour markets," Oxford Economic Papers, Oxford University Press, vol. 69(3), pages 734-757.
    4. Heuermann, Daniel F. & Assmann, Franziska & vom Berge, Philipp & Freund, Florian, 2017. "The distributional effect of commuting subsidies - Evidence from geo-referenced data and a large-scale policy reform," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 11-24.
    5. Ben-Dor, Golan & Ogulenko, Aleksey & Klein, Ido & Ben-Elia, Eran & Benenson, Itzhak, 2024. "Simulation-based policy evaluation of monetary car driving disincentives in Jerusalem," Transportation Research Part A: Policy and Practice, Elsevier, vol. 183(C).
    6. Wang, Bing & Li, Shuai & Wang, Qi & Lin, Zhenhong, 2020. "Understanding travelers’ mobility decisions in response to customer incentives," Transport Policy, Elsevier, vol. 97(C), pages 113-120.
    7. Dauth, Wolfgang & Haller, Peter, 2020. "Is there loss aversion in the trade-off between wages and commuting distances?," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    8. Fan, Wenbo & Jiang, Xinguo & Erdogan, Sevgi & Sun, Yanshuo, 2016. "Modeling and evaluating FAIR highway performance and policy options," Transport Policy, Elsevier, vol. 48(C), pages 156-168.
    9. Gaigné, Carl & Koster, Hans R.A. & Moizeau, Fabien & Thisse, Jacques-François, 2022. "Who lives where in the city? Amenities, commuting and income sorting," Journal of Urban Economics, Elsevier, vol. 128(C).
    10. Levy, Nadav & Klein, Ido & Ben-Elia, Eran, 2018. "Emergence of cooperation and a fair system optimum in road networks: A game-theoretic and agent-based modelling approach," Research in Transportation Economics, Elsevier, vol. 68(C), pages 46-55.
    11. Pablo González-Aliste & Iván Derpich & Mario López, 2023. "Reducing Urban Traffic Congestion via Charging Price," Sustainability, MDPI, vol. 15(3), pages 1-21, January.
    12. Jacob, Nikita & Munford, Luke & Rice, Nigel & Roberts, Jennifer, 2019. "The disutility of commuting? The effect of gender and local labor markets," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 264-275.
    13. Reichelt, Malte & Haas, Anette, 2015. "Commuting farther and earning more? : how employment density moderates workers commuting distance," IAB-Discussion Paper 201533, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    14. Ortúzar, Juan de Dios & Bascuñán, Raúl & Rizzi, Luis Ignacio & Salata, Andrés, 2021. "Assessing the potential acceptability of road pricing in Santiago," Transportation Research Part A: Policy and Practice, Elsevier, vol. 144(C), pages 153-169.
    15. Cavallaro, Federico & Giaretta, Federico & Nocera, Silvio, 2018. "The potential of road pricing schemes to reduce carbon emissions," Transport Policy, Elsevier, vol. 67(C), pages 85-92.
    16. Bliemer, Michiel C.J. & Loder, Allister & Zheng, Zuduo, 2024. "A novel mobility consumption theory for road user charging," Transportation Research Part B: Methodological, Elsevier, vol. 189(C).
    17. Haiyan Zhu & Hongzhi Guan & Yan Han & Wanying Li, 2020. "Can Road Toll Convince Car Travelers to Adjust Their Departure Times? Accounting for the Effect of Choice Behavior under Long and Short Holidays," Sustainability, MDPI, vol. 12(24), pages 1-29, December.
    18. Gintare Morkute, 2014. "Growing surrounded by decline: do the growing sectors benefit from sharing a labour pool with declining sectors," ERSA conference papers ersa14p1584, European Regional Science Association.
    19. Subhan, Fazle & Ali, Yasir & Zhao, Shengchuan & Oviedo-Trespalacios, Oscar, 2023. "Understanding and modeling willingness-to-pay for public policies to enhance road safety: A perspective from Pakistan," Transport Policy, Elsevier, vol. 141(C), pages 182-196.
    20. Keisuke KONDO, 2020. "A Structural Estimation of the Disutility of Commuting," Discussion papers 20031, Research Institute of Economy, Trade and Industry (RIETI).

    More about this item

    Keywords

    Welfare costs; Urban traffic; Retail prices;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:162:y:2025:i:c:p:396-405. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.