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Modelling social welfare effects of relocation and road pricing

Author

Listed:
  • Babri, Sahar

    (Dept. of Business and Management Science, Norwegian School of Economics)

  • McArthur, David Philip

    (Urban Big Data Centre, University of Glasgow)

  • Thorsen, Inge

    (Stord/Haugesund University College)

  • Ubøe, Jan

    (Dept. of Business and Management Science, Norwegian School of Economics)

Abstract

Road pricing is a popular congestion reduction strategy. However, there may be wider impacts associated with a road toll. We consider a factor which is sometimes overlooked, namely that workers and firms may choose to change location in response to changes in the travel costs. A spatial equilibrium model is used to analyse suboptimalities in road pricing which may occur if relocations are ignored. We show that such suboptimalities can be substantial. The advantage of the model we use over many existing approaches is that it is easy to implement, and requires very little data.

Suggested Citation

  • Babri, Sahar & McArthur, David Philip & Thorsen, Inge & Ubøe, Jan, 2014. "Modelling social welfare effects of relocation and road pricing," Discussion Papers 2014/42, Norwegian School of Economics, Department of Business and Management Science.
    • Handle: RePEc:hhs:nhhfms:2014_042
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    File URL: http://hdl.handle.net/11250/227761
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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