The welfare consequences of urban traffic regulations

Isis Durrmeyer () and Nicolas Martinez Franco ()
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Isis Durrmeyer: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Nicolas Martinez Franco: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: We develop and estimate a structural model of urban transportation to evaluate traffic-reducing policies in Paris. Individuals choose transportation mode and departure time subject to heterogeneous preferences, scheduling constraints, and congestion technologies that vary across city zones. We find that mode switching dominates temporal substitution, limiting concerns about trip rescheduling undermining the effectiveness of peak-hour interventions. All policies reduce consumer surplus, as speed gains never offset their costs, but toll-based instruments generate welfare gains through revenue redistribution. The per-kilometer toll achieves, on average, 77.5% of first-best welfare gains across stringency levels.

Keywords: structural model; policy evaluation; transportation; congestion; distributional effects; air pollution (search for similar items in EconPapers)
Date: 2026-07-23
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