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

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 Paretoimproving 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.

Mode choice and railway subsidy in a congested monocentric city with endogenous population distribution

“…Therefore, residents' income heterogeneity should be incorporated to the model. Secondly, in reality, morning peak-hour congestion is generally dynamic, and commuters may choose to use the less congested mode to travel and/or to depart early or late in order to reduce congestion (Gubins and Verhoef, 2014;Wang and Du, 2016a;Xu et al, 2017). It is of interest to model residents' departure time choice, mode choice and residential location choice in an integrated urban framework.…”

“…Thus, direct financial subsidies are often provided by local governments to ensure suitable coverage of transit service (Gwilliam 2008;Tscharaktschiew and Hirte, 2012;Drevs et al, 2014). The source of transit subsidies mainly comes from local land revenue, property taxes, gasoline taxes, road tolls or others (Frankena, 1973;Creutzig, 2014;Xu et al, 2017). In this paper, the land revenue from land rents belongs to the government.…”

“…Meanwhile, rapid developments of urban subways and railway networks such as mass transit systems in these cities have broadened travel mode choices to commuters (Yang et al, 2016, Peng et al, 2017, and governments and transit agencies are putting in vast sum of investments and subsidies to provide a reasonable level of transit operations throughout the cities (Wang et al, 2015;Xu et al, 2017). These rapid and complex developments in cities raise challenging research questions, especially on the agenda of sustainable urban development.…”