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Optimal Environmental Road Pricing and Integrated Daily Commuting Patterns

Jessica Coria and Xiao-Bing Zhang ()

No 682, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: Road pricing can improve air quality by reducing and spreading traffic flows. Nevertheless, air quality does not depend only on traffic flows, but also on pollution dispersion. In this paper we investigate the effects of the temporal variation in pollution dispersion on optimal road pricing, and show that time-varying road pricing is needed to make drivers internalize the social costs of both time-varying congestion and time- varying pollution. To this end, we develop an ecological economics model that takes into account the effects of road pricing on integrated daily commuting patterns. We characterize the optimal road pricing when pollution dispersion varies over the day and analyze its effects on traffic flows, arrival times, and the number of commuters by car.

Keywords: Air pollution; Road transportation; Road pricing; Pollution dispersion (search for similar items in EconPapers)
JEL-codes: Q53 Q58 R41 R48 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg, nep-res, nep-tre and nep-ure
Date: 2016-12
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