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The Welfare Effects of Cordon Pricing and Area Pricing Simulation with a Multi-regional General Equilibrium Model


  • Shota Fujishima


This paper analyses the welfare effects of cordon pricing and area pricing through numerical simulations with a multi-regional general equilibrium model. The toll policies achieve approximately 60 per cent of the efficiency gains from the Pigouvian congestion tax. Cordon pricing is better if long-distance commuting is prevalent, while area pricing is better if a city has a large central urban area. With the introduction of cordon pricing or area pricing, a toll district becomes more attractive as a residential place but less attractive as a workplace. The toll policies promote short-distance commuting but discourage the use of public transport in toll-free commutes. © 2011 LSE and the University of Bath

Suggested Citation

  • Shota Fujishima, 2011. "The Welfare Effects of Cordon Pricing and Area Pricing Simulation with a Multi-regional General Equilibrium Model," Journal of Transport Economics and Policy, University of Bath, vol. 45(3), pages 481-504, September.
  • Handle: RePEc:tpe:jtecpo:v:45:y:2011:i:3:p:481-504

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    1. repec:bla:presci:v:96:y:2017:i:1:p:163-190 is not listed on IDEAS
    2. repec:eee:retrec:v:62:y:2017:i:c:p:68-79 is not listed on IDEAS
    3. 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.

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