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Congestion pricing effects on firm and household location choices in monocentric and polycentric cities

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  • Zhang, Wenjia
  • Kockelman, Kara M.

Abstract

This paper develops a spatial general equilibrium model to explore the land use effects of three roadway congestion pricing strategies in both monocentric and polycentric city settings, where household and firm locations and wage rates are endogenously determined. Simulation results show how marginal cost pricing (MCP) of travel in the polycentric setting can cause many jobs (16% in this example) to leave the central business district (CBD) and relocate to a relatively dense but suburban ring. To achieve city-wide welfare gains, efficient land use regulations should permit such job decentralization. Simulations also illuminate how simple, distance-based tolls generate lower welfare improvements, but stimulate similar land use effects. A cordon toll imposed in monocentric cities may agglomerate all firms in a smaller CBD or re-agglomerate parts of firms in a sub-center ring of development. Overall, results highlight how an urban economic model enabling endogenous business and household decisions can illuminate various travel, congestion pricing, and land use connections.

Suggested Citation

  • Zhang, Wenjia & Kockelman, Kara M., 2016. "Congestion pricing effects on firm and household location choices in monocentric and polycentric cities," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 1-12.
    • Handle: RePEc:eee:regeco:v:58:y:2016:i:c:p:1-12
    DOI: 10.1016/j.regsciurbeco.2016.01.002
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    3. Du, Rui & Zheng, Siqi, 2020. "Agglomeration, housing affordability, and new firm formation: The role of subway network," Journal of Housing Economics, Elsevier, vol. 48(C).
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    6. Romain Gaté, 2019. "Efficiency of road pricing schemes with endogenous workplace locations in a polycentric city," Working Papers halshs-02335766, HAL.
    7. Zhang, Wenjia & Kockelman, Kara M., 2016. "Optimal policies in cities with congestion and agglomeration externalities: Congestion tolls, labor subsidies, and place-based strategies," Journal of Urban Economics, Elsevier, vol. 95(C), pages 64-86.
    8. Masanobu Kii & Varameth Vichiensan & Carlos Llorca & Ana Moreno & Rolf Moeckel & Yoshitsugu Hayashi, 2021. "Impact of Decentralization and Rail Network Extension on Future Traffic in the Bangkok Metropolitan Region," Sustainability, MDPI, vol. 13(23), pages 1-24, November.
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    10. Kono, Tatsuhito & Nakajima, Kentaro & Ozane, Kanta, 2023. "Quantitative Impact Analysis of the Centralization of Firms in the Tokyo Metropolitan Area Considering Firm-to-Firm Trade Networks," MPRA Paper 117594, University Library of Munich, Germany.

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    More about this item

    Keywords

    Congestion pricing; Polycentric urban economics; Land use; Job decentralization;
    All these keywords.

    JEL classification:

    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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