Efficiency of road pricing schemes with endogenous workplace locations in a polycentric city

Romain Gaté

Working Papers from HAL

Abstract: This paper aims to measure the efficiency of different road pricing schemes (Pigouvian tax, flat tax and cordon toll) to address congestion externalities when the locations of jobs and dwellings within a city are endogenous. The model captures the fact that commuters face a trade-off between taking advantage of the wage premium in the Central Business District (CBD) and being stuck in traffic. I find that the Pigouvian tax strategy is not a social optimum due to the presence of two market failures in the urban economy: congestion and misallocation of jobs within the city. A Pigouvian tax on commuters cannot solve two different problems simultaneously, namely, reducing the congestion level given the locations of jobs and reaching the optimal spatial allocation of firms. Without regulation, the number of jobs in the CBD is too high (and the congestion cost is excessive), while the Pigouvian tax generates a CBD that is too small. In addition, a flat tax is not necessarily worse than a Pigouvian tax, in contrast to the cordon toll.

Keywords: Polycentric city; Second-best policies; Congestion; Welfare; Urban land use (search for similar items in EconPapers)
Date: 2019-10-18
New Economics Papers: this item is included in nep-res, nep-tre and nep-ure
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02335766
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://shs.hal.science/halshs-02335766/document (application/pdf)

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:hal:wpaper:halshs-02335766

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().