EconPapers    
Economics at your fingertips  
 

When is Encouraging Consumption of Common Property Second Best? Sorting, Congestion and Entry in the Commons

Jonathan Hughes () and Daniel Kaffine

No 2013-05, Working Papers from Colorado School of Mines, Division of Economics and Business

Abstract: First-best pricing or assignment of property rights for rival and non-excludable goods is often infeasible. In a second-best setting where the social planner cannot limit total use, we show common-property resources can be over or under-consumed. This depends on whether the external benefits of reallocating users to less congested goods outweigh the additional costs imposed by new entrants. Applied to traffic congestion in Los Angeles, we find high-occupancy vehicle (HOV) lanes are under-consumed in the short run and over-consumed in the longer run. Surprisingly, encouraging HOV lane use increases expected congestion costs and decreases welfare on every route we study.

Pages: 55 pages
Date: 2013-08
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://econbus-papers.mines.edu/working-papers/wp201305.pdf First version, 2013 (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:mns:wpaper:wp201305

Access Statistics for this paper

More papers in Working Papers from Colorado School of Mines, Division of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Jared Carbone ().

 
Page updated 2021-12-15
Handle: RePEc:mns:wpaper:wp201305