EconPapers    
Economics at your fingertips  
 

Tradable mobility permits in a monocentric city with pre-existing labor taxation: A general equilibrium perspective

Diego Candia and Erik Verhoef

Transportation Research Part B: Methodological, 2022, vol. 163, issue C, 145-165

Abstract: This paper studies tradable mobility permit schemes in a monocentric city with a distorting labor tax, considering spatially differentiated allocations of permits to households. Numerical results show that an allocation of permits proportional to labor supply reaches about 99.9% of first-best welfare, clearly outperforming a scheme with lump-sum allocation of permits, and being more efficient than the second-best tax for levels of the labor tax of 20% or higher. This is due to the welfare gains of incentivizing labor supply, which has an effect similar to the revenue recycling effect of conventional road pricing, and that can be optimized by the social planner by exploiting spatial differences. Other alternatives, such as an allocation of permits proportional to distance from the CBD and a cordon-based scheme do not reach those high levels of efficiency. Our results provide insights into the efficiency of tradable driving permit schemes as an alternative to road pricing to tackle present externalities, showing that a spatial differentiation of the allocation of permits can be a powerful instrument in the hands of the regulator.

Keywords: Tradable permits; Congestion pricing; Monocentric city; Revenue recycling; Spatial general equilibrium (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S019126152200114X
Full text for ScienceDirect subscribers only

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: https://EconPapers.repec.org/RePEc:eee:transb:v:163:y:2022:i:c:p:145-165

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.trb.2022.07.002

Access Statistics for this article

Transportation Research Part B: Methodological is currently edited by Fred Mannering

More articles in Transportation Research Part B: Methodological from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-19
Handle: RePEc:eee:transb:v:163:y:2022:i:c:p:145-165