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Transport tax reform, commuting and endogenous values of time

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  • DE BORGER, Bruno
  • VAN DENDER, Kurt

Abstract

We consider a model of urban transport with two trip purposes, commuting (assumed perfectly complementary to labour supply) and non-commuting, to analyse the effects of transport tax reform on the value of time and marginal external congestion costs. Higher commuting taxes plausibly reduce time values, but higher non-commuting transport prices will typically raise the value of time. The intuition for this latter finding is that the reduction in congestion that follows from the tax increase itself raises net wages per hour of work (inclusive of commuting time). Empirical illustrations with Belgian data show a potentially large effect of transport tax reform on time values. In quite a few of the tax reforms studied traffic levels are reduced, but the increase in time values implies that marginal external congestion costs actually increase.

Suggested Citation

  • DE BORGER, Bruno & VAN DENDER, Kurt, "undated". "Transport tax reform, commuting and endogenous values of time," Working Papers 2003004, University of Antwerp, Faculty of Business and Economics.
    • Handle: RePEc:ant:wpaper:2003004
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    1. Tscharaktschiew, Stefan & Hirte, Georg, 2012. "Should subsidies to urban passenger transport be increased? A spatial CGE analysis for a German metropolitan area," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(2), pages 285-309.
    2. Bruno De Borger & Bart Wuyts, 2009. "Commuting, Transport Tax Reform and the Labour Market: Employer-paid Parking and the Relative Efficiency of Revenue Recycling Instruments," Urban Studies, Urban Studies Journal Limited, vol. 46(1), pages 213-233, January.
    3. Hirte, Georg & Tscharaktschiew, Stefan, 2018. "The impact of anti-congestion policies and the role of labor-supply margins," CEPIE Working Papers 04/18, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    4. Tscharaktschiew, Stefan, 2016. "The private (unnoticed) welfare cost of highway speeding behavior from time saving misperceptions," Economics of Transportation, Elsevier, vol. 7, pages 24-37.
    5. Gutiérrez-i-Puigarnau, Eva & van Ommeren, Jos N., 2010. "Labour supply and commuting," Journal of Urban Economics, Elsevier, vol. 68(1), pages 82-89, July.
    6. Hörcher, Daniel & De Borger, Bruno & Seifu, Woubit & Graham, Daniel J., 2020. "Public transport provision under agglomeration economies," Regional Science and Urban Economics, Elsevier, vol. 81(C).
    7. 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.
    8. Eva Gutierrez-i-Puigarnau & Jos van Ommeren, 2009. "Labour Supply and Commuting: Implications for Optimal Road Taxes," Tinbergen Institute Discussion Papers 09-008/3, Tinbergen Institute.
    9. Nitzsche, Eric & Tscharaktschiew, Stefan, 2013. "Efficiency of speed limits in cities: A spatial computable general equilibrium assessment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 56(C), pages 23-48.
    10. Hirte, Georg & Tscharaktschiew, Stefan, 2020. "The role of labor-supply margins in shaping optimal transport taxes," Economics of Transportation, Elsevier, vol. 22(C).
    11. Robson, Edward N. & Wijayaratna, Kasun P. & Dixit, Vinayak V., 2018. "A review of computable general equilibrium models for transport and their applications in appraisal," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 31-53.
    12. Hirte, Georg & Tscharaktschiew, Stefan, 2013. "The optimal subsidy on electric vehicles in German metropolitan areas: A spatial general equilibrium analysis," Energy Economics, Elsevier, vol. 40(C), pages 515-528.
    13. Bert Saveyn, 2006. "Are NIMBY'S commuters?," Working Papers of Department of Economics, Leuven ces0604, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    14. Charlotte Berg, 2007. "Household Transport Demand in a CGE-framework," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(3), pages 573-597, July.
    15. Knud Munk, 2000. "Assessment of the Introduction of Road Pricing Using a Computable General Equilibrium Model," Regional and Urban Modeling 283600065, EcoMod.
    16. Hirte, Georg & Tscharaktschiew, Stefan, 2013. "Income tax deduction of commuting expenses in an urban CGE study: The case of German cities," Transport Policy, Elsevier, vol. 28(C), pages 11-27.
    17. Saveyn Bert, 2006. "Does Commuting Change the ranking of environmental instruments?," Energy, Transport and Environment Working Papers Series ete0603, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
    18. 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.
    19. De Borger, Bruno & Wuyts, Bart, 2011. "The structure of the labor market, telecommuting, and optimal peak period congestion tolls: A numerical optimization model," Regional Science and Urban Economics, Elsevier, vol. 41(5), pages 426-438, September.

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    Keywords

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    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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