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Compact or Spread-Out Cities: Urban Planning, Taxation, and the Vulnerability to Transportation Shocks

  • François Gusdorf

    (CIRED)

  • Stéphane Hallegatte

    (Centre International de Recherche sur l'Environnement et le Développement Ecole Nationale de la Météorologie)

This paper shows that cities made more compact by transportation taxation are more robust than spread-out cities to shocks in transportation costs. Such a shock, indeed, entails negative transition effects that are caused by housing infrastructure inertia and are magnified in low-density cities. Distortions due to a transportation tax, however, have in absence of shock detrimental consequences that need to be accounted for. The range of beneficial tax levels can, therefore, be identified as a function of the possible magnitude of future shocks in transportation costs. These taxation levels, which can reach significant values, reduce city vulnerability and prevent lock-ins in under-optimal situations.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2007.17.

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Date of creation: Feb 2007
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Handle: RePEc:fem:femwpa:2007.17
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