IDEAS home Printed from https://ideas.repec.org/a/aiy/jnjaer/v23y2024i2p341-363.html
   My bibliography  Save this article

Routing Utility Transit Infrastructure: A Social Welfare Theory Approach

Author

Listed:
  • Oleg O. Smirnov, Sergey B. Sivaev

Abstract

The construction of real estate for a wide range of purposes necessitates the creation of new infrastructure. This paper shows that the existing methodology for paying for connection to water supply and sanitation systems contains a significant drawback in the form of the creation of many overlapping networks instead of the construction of one common transit network. This approach leads to welfare losses for both society and developers. The purpose of the study is to substantiate the ineffectiveness of the network routing approach, which is used in the methodology of payment for connection to water supply and sewerage systems from the standpoint of the theory of social welfare. The scientific hypothesis is that the creation of a large-diameter transit network in the future turns out to be less expensive than many separate sections of distribution networks of smaller diameter. In order to prove this point, the cost of construction and maintenance of networks is estimated in these two approaches, for which 118 tariff decisions for 85 regional capitals were analyzed. The data for the assessment is taken as the average of connection tariffs per unit length of a network of the corresponding diameter for 2022. Additionally, the potential for increasing the efficiency of land use in each of the two approaches was assessed. According to the results of the study, it was demonstrated that a fee from the developer, which involves the creation of common transit networks, is more preferable for all participants in the connection. This means that the sum total of costs within the local optimum will be higher than in the case of one global optimum for the territory as a whole, that is, the second case can be called the most subordinate to public interests. The theoretical significance of the work carried out lies in the graphic justification of the need to apply fees from developers when developing infrastructure. The practical significance of the work lies in the substantiation of the construction of a morphologically correct structure of the network economy.

Suggested Citation

  • Oleg O. Smirnov, Sergey B. Sivaev, 2024. "Routing Utility Transit Infrastructure: A Social Welfare Theory Approach," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 23(2), pages 341-363.
  • Handle: RePEc:aiy:jnjaer:v:23:y:2024:i:2:p:341-363
    DOI: https://doi.org/10.15826/vestnik.2024.23.2.014
    as

    Download full text from publisher

    File URL: https://journalaer.ru/fileadmin/user_upload/site_15907/2024/04_Smirnov_Sivaev__1_.pdf
    Download Restriction: no

    File URL: https://libkey.io/https://doi.org/10.15826/vestnik.2024.23.2.014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. A. Radygin & Y. Simachev & R. Entov., 2015. "State-Owned Company: Detection Zone of Government Failure or Market Failure?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
    2. A. Radygin & Y. Simachev & R. Entov, 2015. "State-owned company: Detection Zone of Government Failure or market Failure?," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 1.
    3. George E. Peterson, 2008. "Unlocking Land Values to Finance Urban Infrastructure," World Bank Publications - Books, The World Bank Group, number 6552.
    4. Yinger, John, 1998. "The Incidence of Development Fees and Special Assessments," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(1), pages 23-41, March.
    5. Olaf Merk & Stéphane Saussier & Carine Staropoli & Enid Slack & Jay-Hyung Kim, 2012. "Financing Green Urban Infrastructure," OECD Regional Development Working Papers 2012/10, OECD Publishing.
    6. Oleg O. Smirnov, 2023. "Assessment of the Impact of Transparency and Affordability of Technological Connection on the Developer's Decision on New Construction in Russian Cities," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(2), pages 355-380.
    7. Yinger, John, 1998. "The Incidence of Development Fees and Special Assessments," National Tax Journal, National Tax Association, vol. 51(n. 1), pages 23-41, March.
    8. Rubin, Jeffrey I. & Seneca, Joseph J., 1991. "Density bonuses, exactions, and the supply of affordable housing," Journal of Urban Economics, Elsevier, vol. 30(2), pages 208-223, September.
    9. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521311120, October.
    10. Anderson John E., 1993. "Land Development, Externalities, and Pigouvian Taxes," Journal of Urban Economics, Elsevier, vol. 33(1), pages 1-9, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. J. Peter Clinch & Eoin O'Neill, 2010. "Designing Development Planning Charges: Settlement Patterns, Cost Recovery and Public Facilities," Urban Studies, Urban Studies Journal Limited, vol. 47(10), pages 2149-2171, September.
    2. Burge, Gregory & Ihlanfeldt, Keith, 2006. "Impact fees and single-family home construction," Journal of Urban Economics, Elsevier, vol. 60(2), pages 284-306, September.
    3. Randy Bluffstone & Matt Braman & Linda Fernandez & Tom Scott & Pei‐Yi Lee, 2008. "Housing, Sprawl, And The Use Of Development Impact Fees: The Case Of The Inland Empire," Contemporary Economic Policy, Western Economic Association International, vol. 26(3), pages 433-447, July.
    4. Burge, Gregory, 2014. "The capitalization effects of school, residential, and commercial impact fees on undeveloped land values," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 1-13.
    5. Changhoon Jung & Chul-Young Roh & Younguck Kang, 2009. "Longitudinal Effects of Impact Fees and Special Assessments on the Level of Capital Spending, Taxes, and Long-Term Debt in American Cities," Public Finance Review, , vol. 37(5), pages 613-636, September.
    6. Lozano-Gracia, Nancy & Young, Cheryl & Lall, Somik V. & Vishwanath, Tara, 2013. "Leveraging land to enable urban transformation : lessons from global experience," Policy Research Working Paper Series 6312, The World Bank.
    7. Walls, Margaret & McConnell, Virginia, 2004. "Incentive-Based Land Use Policies and Water Quality in the Chesapeake Bay," RFF Working Paper Series dp-04-20, Resources for the Future.
    8. Xiaofang Dong & Shihe Fu & Yufei Yuan, 2013. "Impact Fees and Real Estate Prices: Evidence from 35 Chinese Cities," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 8(2), pages 207-219, June.
    9. J. Peter Clinch & Eoin O'Neill, 2010. "Assessing the Relative Merits of Development Charges and Transferable Development Rights in an Uncertain World," Urban Studies, Urban Studies Journal Limited, vol. 47(4), pages 891-911, April.
    10. John Anderson, 2005. "Taxes and Fees as Forms of Land Use Regulation," The Journal of Real Estate Finance and Economics, Springer, vol. 31(4), pages 413-427, December.
    11. Adam T. Jones, 2015. "Impact Fees and Employment Growth," Economic Development Quarterly, , vol. 29(4), pages 341-346, November.
    12. Ihlanfeldt, Keith R. & Shaughnessy, Timothy M., 2004. "An empirical investigation of the effects of impact fees on housing and land markets," Regional Science and Urban Economics, Elsevier, vol. 34(6), pages 639-661, November.
    13. Adam Found, 2021. "Development Charges and Housing Affordability: A False Dichotomy?," IMFG Papers 56, University of Toronto, Institute on Municipal Finance and Governance.
    14. Burge, Gregory & Ihlanfeldt, Keith, 2009. "Development impact fees and employment," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 54-62, January.
    15. Adam Jones, 2015. "Fees and Firms: An Empirical Examination of the Relationship Between Development Impact Fees and Firms," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(2), pages 261-269, June.
    16. repec:wyi:journl:002181 is not listed on IDEAS
    17. Charles F. Mason & Lucija A. Muehlenbachs & Sheila M. Olmstead, 2015. "The Economics of Shale Gas Development," Annual Review of Resource Economics, Annual Reviews, vol. 7(1), pages 269-289, October.
    18. Muller Nicholas & Tong Daniel & Mendelsohn Robert, 2009. "Regulating NOx and SO2 Emissions in Atlanta," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(2), pages 1-32, March.
    19. Ian W.H. Parry, 2002. "A Second-Best Analysis of Environmental Subsidies," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 28, pages 555-572, Edward Elgar Publishing.
    20. Bednar-Friedl, Birgit & Farmer, Karl, 2010. "External balance, dynamic efficiency, and the welfare effects of unilateral and multilateral permit policies in interdependent economies," Economic Modelling, Elsevier, vol. 27(5), pages 980-990, September.
    21. Chia-Ying Chang & Chien-Chieh Huang & Ping Wang, 2000. "Fight Fire with Fire: A Model of Pollution and Growth with Cooperative Settlement," Vanderbilt University Department of Economics Working Papers 0010, Vanderbilt University Department of Economics.

    More about this item

    Keywords

    tariff regulation; engineering infrastructure; utility connection; public welfare; water supply; sanitation.;
    All these keywords.

    JEL classification:

    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General
    • L99 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aiy:jnjaer:v:23:y:2024:i:2:p:341-363. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Natalia Starodubets (email available below). General contact details of provider: https://edirc.repec.org/data/seurfru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.