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Optimal facility placement and discriminatory congestion pricing in neighborhoods with different time costs

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  • H. Shelton Brown

    () (Management and Policy Studies, University of Texas, Houston School of Public Health, Brownsville RAHC, 80 Fort Brown, 78520 Brownsville, TX, USA)

Abstract

In many urban areas, time costs or wages vary between neighborhoods, but there is little wage variation within a given neighborhood. Neighborhoods are often labelled "working class," "middle class," or even "wealthy." For this reason, there are many efficiency and distributional issues related to location because location largely determines access costs. Congestion also affects time costs and access. Many public policies are geared towards improving access for households in low-wage neighborhoods. Public facilities are built; some firms receive nonprofit status. In order to evaluate these policies, normative theory is needed. This paper develops theory on the optimal placement of facilities and their congestion prices in urban areas with wage variation between neighborhoods. The results show that optimal locations and prices depend on the extent of wage inequality.

Suggested Citation

  • H. Shelton Brown, 2002. "Optimal facility placement and discriminatory congestion pricing in neighborhoods with different time costs," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 36(2), pages 181-196.
  • Handle: RePEc:spr:anresc:v:36:y:2002:i:2:p:181-196
    Note: Received: February 2001/Accepted: September 2001
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    1. repec:eee:ijrema:v:25:y:2008:i:4:p:294-300 is not listed on IDEAS

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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