Economics at your fingertips  

Second‐Best Road Taxes in Polycentric Networks with Distorted Labor Markets

Ioannis Tikoudis ()

Scandinavian Journal of Economics, 2020, vol. 122, issue 1, 391-428

Abstract: This paper examines the interaction of road taxes with spatially invariant labor taxation in a polycentric network. It derives analytical expressions for the network counterparts of the traditional double‐dividend effects (i.e., Pigouvian, tax‐interaction, and revenue‐recycling effects), and computes them under different policy regimes. The analysis reveals a series of conditions under which a system of cordons around the major nodes of a network might be more efficient than marginal external cost pricing. With a high elasticity of labor supply and limited public transport coverage, it is shown that the Pigouvian tax rule might reduce welfare even when the generated revenue is used to finance labor tax cuts.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0347-0520

Access Statistics for this article

Scandinavian Journal of Economics is currently edited by Richard Friberg, Matti Liski and Kjetil Storesletten

More articles in Scandinavian Journal of Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2021-05-03
Handle: RePEc:bla:scandj:v:122:y:2020:i:1:p:391-428