Political economy of commuting subsidies

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may POLITICAL ECONOMY OF COMMUTING SUBSIDIES AbstractWe 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.JEL Code: R14, R48.

Commuting subsidies with two transport modes

“…Residents as a group cannot gain from subsidies. This is shown also by Borck and Wrede [3] in the case with variable land consumption when the initial subsidy rate is zero. Here, it holds more generally.…”

“…The paper uses a simplified version of Borck and Wrede [3], assuming fixed housing consumption. However, we extend the model by allowing for two transport modes.…”

Economic and Environmental Effects of Public Transport Subsidy Policies: a Spatial CGE Model of Beijing

“…The classical monocentric urban model assumes that transport subsidies will decrease the bid-rent curve slope, resulting in a larger urban area, lower population density, and a reduced suburban-urban rent differentiation, though they will cause urban expansion and road congestion [16,17]. In light of such negative effects, Borck and Wrede [18], adopting the perspective of political economy, considered the political ramifications of government decisions to subsidize public transport as a form of income redistribution. In contrast, the multicenter urban model argues that transport subsidies can optimize the allocation of labor if there are wage differences, agglomerative economies, or job-housing spatial imbalances between zones.…”

Income Tax Deduction of Commuting Expenses and Tax Funding in an Urban CGE Study: The Case of German Cities

“…This is the reason why we implement revenue neutral tax reforms where we look at 3 Of course, there is a large body of literature on transport subsidies in general (see e.g. De Borger and Wuyts, 2009;Parry and Small, 2009;Borck and Wrede, 2009;Su and DeSalvo, 2008;Borck and Wrede, 2008;Brueckner, 2005;Borck and Wrede, 2005;van Dender, 2003;Calthrop, 2001;Martin, 2001;Zenou, 2000) applying either non-spatial or spatial approaches. Tscharaktschiew and Hirte (2011) provide a review of the corresponding literature and summarize the main …ndings.…”