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Inefficiencies in regional commuting policy

  • Toon VANDYCK
  • Stef PROOST

This paper discusses investments in transport infrastructure and incentives for commuting taxes in a multiregional setting. We study the horizontal and vertical interactions between governments. We identify incentives for strategic and tax exporting behavior that might lead to underinvestment in transport infrastructure. Furthermore, we show that the intensity of the strategic behavior is affected by geographic firm ownership structure, the number of labor-supplying regions and the revenue-sharing mechanism in the federation. A numerical example applies the insights on commuting in Belgium.

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File URL: http://www.econ.kuleuven.be/eng/ew/discussionpapers/Dps11/Dps1118.pdf
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Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces11.18.

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Date of creation: Aug 2011
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Handle: RePEc:ete:ceswps:ces11.18
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Web page: http://www.econ.kuleuven.be/ew
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  1. Parry, Ian & Bento, Antonio, 1999. "Revenue Recycling and the Welfare Effects of Road Pricing," Discussion Papers dp-99-45, Resources For the Future.
  2. DE BORGER, Bruno & PROOST, Stef & VAN DENDER, K., . "Congestion and tax competition in a parallel network," Working Papers 2004003, University of Antwerp, Faculty of Applied Economics.
  3. Bruno de Borger & Stef Proost, 2004. "Vertical and horizontal tax competition in the transport sector," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(4), pages 45-64.
  4. Rainald Borck & Matthias Wrede, 2007. "Commuting Subsidies with two Transport Modes," CESifo Working Paper Series 1972, CESifo Group Munich.
  5. Verhoef Erik T., 1997. "Externalities," Serie Research Memoranda 0031, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  6. Borck, Rainald & Wrede, Matthias, 2009. "Subsidies for intracity and intercity commuting," Journal of Urban Economics, Elsevier, vol. 66(1), pages 25-32, July.
  7. De Borger, B. & Dunkerley, F. & Proost, S., 2007. "Strategic investment and pricing decisions in a congested transport corridor," Journal of Urban Economics, Elsevier, vol. 62(2), pages 294-316, September.
  8. repec:dgr:uvatin:20030078 is not listed on IDEAS
  9. Wrede, Matthias, 2001. "Should Commuting Expenses Be Tax Deductible? A Welfare Analysis," Journal of Urban Economics, Elsevier, vol. 49(1), pages 80-99, January.
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