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Political Economy of Commuting Subsidies

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  • Rainald Borck
  • Matthias Wrede

Abstract

We study the political economy of commuting subsidies in a model of a mono-centric city with two income classes. Depending on housing demand and transport costs, either the rich or the poor live in the central city and the other group in the suburbs. Commuting subsidies increase the net income of those with long commutes or high transport costs. They also affect land rents and therefore the income of landowners. The paper studies how the locational pattern of the two income classes and the incidence of landownership affects the support for commuting subsidies.

Suggested Citation

  • Rainald Borck & Matthias Wrede, 2004. "Political Economy of Commuting Subsidies," CESifo Working Paper Series 1339, CESifo.
    • Handle: RePEc:ces:ceswps:_1339
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    commuting subsidies; voting; monocentric city;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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