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Welfare costs of urban traffic through retail prices

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  • Yilmazkuday, Hakan

Abstract

This paper investigates the welfare costs of urban traffic by considering its implications on consumer retail prices. Using retail price data for 40 goods and services from 70 cities (covering 47 countries) for multiple years, the estimation results suggest that the elasticity of retail prices with respect to the time spent in urban traffic is about 0.5. This elasticity is further connected to the welfare of consumers by using the implications of an economic model. The corresponding investigation shows that reducing the time spent in urban traffic by one minute improves consumer welfare by about 1.3% for the average city, with a range between 0.8% and 2.3% across cities. Several policy suggestions follow regarding how to reduce the time spent in urban traffic that would improve consumer welfare.

Suggested Citation

  • Yilmazkuday, Hakan, 2025. "Welfare costs of urban traffic through retail prices," Transport Policy, Elsevier, vol. 162(C), pages 396-405.
    • Handle: RePEc:eee:trapol:v:162:y:2025:i:c:p:396-405
    DOI: 10.1016/j.tranpol.2024.12.017
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    More about this item

    Keywords

    Welfare costs; Urban traffic; Retail prices;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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