Second-best urban tolls in a monocentric city with housing market regulations

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This paper investigates second-best congestion pricing in a monocentric city characterized by distortionary regulations in the housing market (building height restrictions, no-development areas and property taxation). We demonstrate that the welfare gain of a Pigouvian tax may first fall and then increase as building height restrictions become more stringent. For example, a Pigouvian toll imposed in a city without restrictions may produce up to 40% larger welfare gains than Pigouvian tolling in a city with a mild, uniform in space, floor-to-area ratio restriction. In the presence of a tax-induced distortion, deviations of the Pigouvian toll can lead to non-negligible welfare gains. We discuss the important policy implications of the above findings.

Original languageEnglish
Pages (from-to)342-359
Number of pages18
JournalTransportation Research Part B: Methodological
Volume117
Issue numberPart A
DOIs
Publication statusPublished - 2018

Fingerprint

housing market
Taxation
welfare
regulation
taxes
building
apartment size
development area
taxation
pricing
Costs

Keywords

  • Building height restrictions
  • Cost-benefit analysis
  • Floor-to-area ratio regulations
  • Monocentric city
  • No-development areas
  • Property tax
  • Road pricing

Cite this

@article{f8b74730f4634487abcf2da73a215ce1,
title = "Second-best urban tolls in a monocentric city with housing market regulations",
abstract = "This paper investigates second-best congestion pricing in a monocentric city characterized by distortionary regulations in the housing market (building height restrictions, no-development areas and property taxation). We demonstrate that the welfare gain of a Pigouvian tax may first fall and then increase as building height restrictions become more stringent. For example, a Pigouvian toll imposed in a city without restrictions may produce up to 40{\%} larger welfare gains than Pigouvian tolling in a city with a mild, uniform in space, floor-to-area ratio restriction. In the presence of a tax-induced distortion, deviations of the Pigouvian toll can lead to non-negligible welfare gains. We discuss the important policy implications of the above findings.",
keywords = "Building height restrictions, Cost-benefit analysis, Floor-to-area ratio regulations, Monocentric city, No-development areas, Property tax, Road pricing",
author = "Ioannis Tikoudis and Verhoef, {Erik T.} and {van Ommeren}, {Jos N.}",
year = "2018",
doi = "10.1016/j.trb.2018.08.014",
language = "English",
volume = "117",
pages = "342--359",
journal = "Transportation Research. Part B: Methodological",
issn = "0191-2615",
publisher = "Elsevier Limited",
number = "Part A",

}

Second-best urban tolls in a monocentric city with housing market regulations. / Tikoudis, Ioannis; Verhoef, Erik T.; van Ommeren, Jos N.

In: Transportation Research Part B: Methodological, Vol. 117, No. Part A, 2018, p. 342-359.

Research output: Contribution to JournalArticleAcademicpeer-review

TY - JOUR

T1 - Second-best urban tolls in a monocentric city with housing market regulations

AU - Tikoudis, Ioannis

AU - Verhoef, Erik T.

AU - van Ommeren, Jos N.

PY - 2018

Y1 - 2018

N2 - This paper investigates second-best congestion pricing in a monocentric city characterized by distortionary regulations in the housing market (building height restrictions, no-development areas and property taxation). We demonstrate that the welfare gain of a Pigouvian tax may first fall and then increase as building height restrictions become more stringent. For example, a Pigouvian toll imposed in a city without restrictions may produce up to 40% larger welfare gains than Pigouvian tolling in a city with a mild, uniform in space, floor-to-area ratio restriction. In the presence of a tax-induced distortion, deviations of the Pigouvian toll can lead to non-negligible welfare gains. We discuss the important policy implications of the above findings.

AB - This paper investigates second-best congestion pricing in a monocentric city characterized by distortionary regulations in the housing market (building height restrictions, no-development areas and property taxation). We demonstrate that the welfare gain of a Pigouvian tax may first fall and then increase as building height restrictions become more stringent. For example, a Pigouvian toll imposed in a city without restrictions may produce up to 40% larger welfare gains than Pigouvian tolling in a city with a mild, uniform in space, floor-to-area ratio restriction. In the presence of a tax-induced distortion, deviations of the Pigouvian toll can lead to non-negligible welfare gains. We discuss the important policy implications of the above findings.

KW - Building height restrictions

KW - Cost-benefit analysis

KW - Floor-to-area ratio regulations

KW - Monocentric city

KW - No-development areas

KW - Property tax

KW - Road pricing

UR - http://www.scopus.com/inward/record.url?scp=85053545161&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85053545161&partnerID=8YFLogxK

U2 - 10.1016/j.trb.2018.08.014

DO - 10.1016/j.trb.2018.08.014

M3 - Article

VL - 117

SP - 342

EP - 359

JO - Transportation Research. Part B: Methodological

JF - Transportation Research. Part B: Methodological

SN - 0191-2615

IS - Part A

ER -