Journal Article

Anti-congestion policies in cities with public transportation

Akin C. Buyukeren and Tomoru Hiramatsu

in Journal of Economic Geography

Volume 16, issue 2, pages 395-421
Published in print March 2016 | ISSN: 1468-2702
Published online January 2015 | e-ISSN: 1468-2710 | DOI: http://dx.doi.org/10.1093/jeg/lbu051
Anti-congestion policies in cities with public transportation

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  • Welfare Economics
  • Taxation, Subsidies, and Revenue
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  • Urban, Rural, and Regional Economics
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  • Regional Government Analysis

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We study how congestion tolls and an urban growth boundary should be designed optimally in a monocentric city with both car and public transit commuting from the suburbs to the central city. The existing monocentric city literature has repeatedly shown that mitigating the congestion externality causes the densification of population toward the city center. In contrast, we find the opposite of densification can occur if public transit mode is present. Modal substitution effect limits the centralizing force of anti-congestion policies. In addition, redistributing tax revenues among residents generates a decentralizing effect by increasing housing demand because marginal utility of income is higher in suburbs. At the optimum, mitigating congestion can cause urban sprawl depending on degree of substitutability between automobile and public transit, relative congestibility of the two modes, tax revenue redistribution and preferences for location and lot size.

Keywords: Congestion; public transportation; congestion tolls; urban growth boundaries; public transportation subsidies; urban sprawl; D61; D62; H21; H23; H44; R13; R14; R41; R48; R52

Journal Article.  9966 words. 

Subjects: Welfare Economics ; Taxation, Subsidies, and Revenue ; Publicly Provided Goods ; Urban, Rural, and Regional Economics ; Transportation Systems ; Regional Government Analysis

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