Agglomeration, Congestion, and the Effects of Rapid Transit Improvements on Cities

Ryan Greenaway-McGrevy and James Allan Jones

No 7, Working Papers from University of Auckland, Economic Policy Center (EPC)

Abstract: We study the impact of rapid transit (RT) within a monocentric city model that features agglomeration efficiencies and congestion frictions. While RT increases wages and city size, its effect on road vehicle use is ambiguous. Vehicle kilometres travelled (VKT) can increase when either agglomeration or congestion effects are sufficiently large. Policies to reduce VKT by developing RT should therefore provide additional (dis)incentives to public (private) transportation. Calibrating the model to Auckland, New Zealand, substantial improvements in RT capacity generate negligible changes in VKT. However, combining improvements with a congestion charge generates meaningful reductions in VKT while maintaining increases in wages.

Keywords: Agglomeration; Congestion; Mode Choice; Rapid Transit; Public Transport; Commuting Costs (search for similar items in EconPapers)
JEL-codes: R12 R15 R41 (search for similar items in EconPapers)
Date: 2022-02
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Persistent link: https://EconPapers.repec.org/RePEc:cyc:wpaper:007

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