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Pareto-improving policies for an idealized two-zone city served by two congestible modes

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  • Xu, Shu-Xian
  • Liu, Ronghui
  • Liu, Tian-Liang
  • Huang, Hai-Jun

Abstract

We study urban structure and traffic congestion of a monocentric city by idealizing its suburb and its core as two zones and then exploring what would happen when they are connected by a congestible highway and a crowded railway system. We introduce dynamic congestion effect into commuters’ departure-time and mode choice behaviours, and analyse the endogenous interactions between their travel and residential relocation choices. Studies ignoring dynamic departure-time behaviour show an ambiguous effect of transit improvements to the city. However, we find that transit improvement has a definitive impact on city structure: it increases the residents’ equilibrium utility, at a cost of increased suburb land use. We show that it is possible to design Pareto-improving land-use and transit policies which benefit the residents without causing urban sprawl. We provide analytically the existence conditions of such policies and suggest that a high return of land use tax to subsidize transit improvement is required.

Suggested Citation

  • Xu, Shu-Xian & Liu, Ronghui & Liu, Tian-Liang & Huang, Hai-Jun, 2018. "Pareto-improving policies for an idealized two-zone city served by two congestible modes," Transportation Research Part B: Methodological, Elsevier, vol. 117(PB), pages 876-891.
    • Handle: RePEc:eee:transb:v:117:y:2018:i:pb:p:876-891
    DOI: 10.1016/j.trb.2017.08.010
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