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Agglomeration, Congestion, and the Effects of Rapid Transit Improvements on Cities

Author

Listed:
  • Ryan Greenaway-McGrevy
  • James Allan Jones

Abstract

We study the impact of rapid transit (RT) within a monocentric city model that features agglomeration efficiencies and congestion frictions. While RT increases wages and city size, its effect on road vehicle use is ambiguous. Vehicle kilometres travelled (VKT) can increase when either agglomeration or congestion effects are sufficiently large. Policies to reduce VKT by developing RT should therefore provide additional (dis)incentives to public (private) transportation. Calibrating the model to Auckland, New Zealand, substantial improvements in RT capacity generate negligible changes in VKT. However, combining improvements with a congestion charge generates meaningful reductions in VKT while maintaining increases in wages.

Suggested Citation

  • Ryan Greenaway-McGrevy & James Allan Jones, 2022. "Agglomeration, Congestion, and the Effects of Rapid Transit Improvements on Cities," Working Papers 007, University of Auckland, Economic Policy Center (EPC).
    • Handle: RePEc:cyc:wpaper:007
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    File URL: https://www.auckland.ac.nz/assets/business/our-research/docs/economic-policy-centre/Agglomeration,%20Congestion,%20and%20the%20Effects%20of%20Rapid.pdf
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    Keywords

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    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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