The Welfare Effects of Cordon Pricing and Area Pricing Simulation with a Multi-regional General Equilibrium Model

Shota Fujishima

Journal of Transport Economics and Policy, 2011, vol. 45, issue 3, 481-504

Abstract: This paper analyses the welfare effects of cordon pricing and area pricing through numerical simulations with a multi-regional general equilibrium model. The toll policies achieve approximately 60 per cent of the efficiency gains from the Pigouvian congestion tax. Cordon pricing is better if long-distance commuting is prevalent, while area pricing is better if a city has a large central urban area. With the introduction of cordon pricing or area pricing, a toll district becomes more attractive as a residential place but less attractive as a workplace. The toll policies promote short-distance commuting but discourage the use of public transport in toll-free commutes. © 2011 LSE and the University of Bath

Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:tpe:jtecpo:v:45:y:2011:i:3:p:481-504

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