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Revenue Choice on a Serial Network

Author

Listed:
  • David Levinson

    () (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)

Abstract

A model to examine the choice by jurisdiction whether to finance roads with taxes or tolls is developed. The idea of decentralized, local control and multiple jurisdictions distinguishes this analysis from one where a central authority maximizes global welfare. Key factors posited to explain the choice include the length of trips using the roads, the size of the governing jurisdiction, the elasticity of demand to revenue instruments, and the transaction costs of collection - which dictate the size and scope of the free rider problem associated with financing. Spatial complexity in this problem results from the fact that jurisdiction residents use both local and non-local networks, and each jurisdiction's network is used by both local and non-local residents. The central thesis argues that, since jurisdictions try to do well by their residents who are both voters and travelers, the effects of a revenue instrument on local residents is a key consideration in the choice of that revenue instrument. Decentralization of control and lower toll collection costs are identified as conditions under which tolls would more likely become the preferred revenue instrument for highways. .

Suggested Citation

  • David Levinson, 2000. "Revenue Choice on a Serial Network," Working Papers 200001, University of Minnesota: Nexus Research Group.
  • Handle: RePEc:nex:wpaper:serial
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/11299/179872
    File Function: First version, 2007
    Download Restriction: no

    References listed on IDEAS

    as
    1. Crane, Randall, 1998. "Travel By Design?," University of California Transportation Center, Working Papers qt3pc4v6jj, University of California Transportation Center.
    2. Giuliano, Genevieve, 1995. "The Weakening Transportation-Land Use Connection," University of California Transportation Center, Working Papers qt1dn8t3w7, University of California Transportation Center.
    3. Levine, Jonathan, 1999. "Access to Choice," University of California Transportation Center, Working Papers qt18s623vq, University of California Transportation Center.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Lei Zhang & David Levinson, 2006. "Economics of Road Network Ownership," Working Papers 200908, University of Minnesota: Nexus Research Group.
    2. Levinson, David, 2005. "Micro-foundations of congestion and pricing: A game theory perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(7-9), pages 691-704.
    3. McQuaid, Ronald & Grieco, Margaret, 2005. "Edinburgh and the politics of congestion charging: Negotiating road user charging with affected publics," Transport Policy, Elsevier, vol. 12(5), pages 475-476, September.
    4. Ubbels, Barry & Verhoef, Erik T., 2008. "Governmental competition in road charging and capacity choice," Regional Science and Urban Economics, Elsevier, vol. 38(2), pages 174-190, March.
    5. De Borger, Bruno & Proost, Stef, 2012. "Transport policy competition between governments: A selective survey of the literature," Economics of Transportation, Elsevier, pages 35-48.
    6. Mun, Se-il & Nakagawa, Shintaro, 2010. "Pricing and investment of cross-border transport infrastructure," Regional Science and Urban Economics, Elsevier, vol. 40(4), pages 228-240, July.
    7. Astrid G├╝hnemann & Andrew Koh & Simon Shepherd, 2016. "Optimal Charging Strategies under Conflicting Objectives for the Protection of Sensitive Areas: A Case Study of the Trans-Pennine Corridor," Networks and Spatial Economics, Springer, vol. 16(1), pages 199-226, March.
    8. Lei Zhang & David Levinson & Shanjiang Zhu, 2007. "Agent-Based Model of Price Competition and Product Differentiation on Congested Networks," Working Papers 200809, University of Minnesota: Nexus Research Group.

    More about this item

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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