does the public sector over provide club goods a general result abstract with nondistortionary user charges the first best and second best of a single club exogenous income economy with identical individuals coincide they differ if incomes differ overprovision of a superior club good then occurs in the second best

comparative statics analysis of a fully closed city abstract this paper extends the existing comparative statics analysis about open or semiclosed cities notably that of w wheaton j econom theor 9 2 223 237 1974 to a fully closed city where urban land rent is redistributed to the city population specifically we examine the effects on changes in exogenous variables such as population size agricultural rent and initial endowments on endogenous variables such as welfare level city size and rent schedule most but not all of the existing results are reestablished surprisingly it is shown that in contrast to the existing literature and perhaps to intuition the city area may shrink when the city population increases the paper also extends the existing literature by analyzing the effect of the exogenous variables on the endogenous income and the demand for transportation it is shown that under plausible assumptions the quantity of transportation demanded declines with its price

the economic theory of clubs some clarifications abstract we provide a classification of club models and relate differences in implications to differences in assumptions then we address two main controversies one concerning the optimality of market provisions of public goods and their optimality and the other concerning the desirability of segregation

the drawbacks and opportunities of carbon charges in metropolitan areas a spatial general equilibrium approach in cities there is a variety of economic and spatial forces that may influence to what extent a travel related co2 emission pricing can be an effective instrument to contribute to the achievement of co2 reduction goals therefore we examine the effectiveness and impact of co2 emission charges using a spatial general equilibrium model of an urban economy calibrated according to an average german city our analyses suggest that the imposition of a pigouvian type co2 emission charge on urban passenger travel may be able to reduce emissions by about 1 11 depending on the estimated social damage cost of carbon dioxide such a policy increases urban welfare mainly on account of a reduction of congestion costs however pricing congestion directly not only provides higher urban welfare but also higher emission reductions pricing congestion and co2 emissions simultaneously allows to achieve a wide range of emission reduction goals if however the reduction goal is very ambitious the emission charge must be raised to higher levels then distortions in the urban markets and in spatial travel decisions lower labor supply and thus urban production income of city residents federal tax revenue income of landowners outside the city all together implying losses in welfare

second best congestion pricing schemes in the monocentric city abstract this paper considers second best congestion pricing in the monocentric city with endogenous residential density and endogenous labour supply a spatial general equilibrium model is developed that allows consideration of the three way interactions between urban density traffic congestion and labour supply congestion pricing schemes are analysed that are second best by design and not because distortions exist elsewhere in the spatial economy like cordon charging and flat kilometre charges both for cobb douglas utility and for ces utility the analyses suggest that the relative welfare losses from second best pricing compared to first best pricing are surprisingly small

agglomeration as spatial interdependence between firms and households abstract the purpose of this paper is to provide a rational for the agglomeration of firms and households over a linear space a state of comprehensive spatial interdependence is obtained by assuming that every household patronizes several firms within this context supply follows the theory of spatial competition generalized to allow for an endogenous demand structure and demand follows the tradition of urban economics generalized to allow for an endogenous supply structure agglomeration emerges through the interplay between spatial boundaries trip dispersion and the existence of positve profits

exclusion and the theory of clubs this paper examines the competitive provision of club goods with costly exclusion we consider two exclusion regimes fine and coarse with fine exclusion a provider can charge both a membership fee and a per use price with coarse exclusion a provider can charge a membership fee only we show that competitive club good providers choose both the efficient exclusion regime which depends on the costs of exclusion and the associated efficient resource allocation thus with costly exclusion the competitive provision of club goods is constrained pareto efficient

quantities qualities and multiple public services in the tiebout model abstract this paper introduces a new more realistic characterization of local public services this characterization fits education parks and streets none of which are a pure samuelsonian good it is shown that tiebout s hypothesis holds for this new type of services provided correct user charges are adopted introducing several local services considerably affects the results the paper emphasizes the difference in tastes with regard to quality as opposed to quantity earlier literature is shown to apply to the role of quality and ignores the role of quantity the effect of the latter makes mixed communities more efficient than segregated ones it is shown that efficient allocation with mixed communities is an equilibrium in a costless mobility tiebout type setting

competitive equilibrium and the core in club economies with anonymous crowding in club economies with anonymous crowding competitive equilibrium states of the economy are efficient and coincide with the core when there is only one private good anonymous admission prices permit consumers with different tastes to share facilities consumers might do so when their demands for facility size and crowding coincide in which case sharing is efficient thus similarity of demands is the relevant consideration for efficiently grouping consumers with different tastes

when are urban growth boundaries not second best policies to congestion tolls pines and sadka proved that a not too stringent urban growth boundary is a second best policy to congestion tolls when traffic congestion is unpriced by assuming that all jobs are exogenously located at one urban center monocentric city d pines e sadka zoning first best second best and third best criteria for allocating land to roads journal of urban economics 17 1985 167 183 the result is also implied by kanemoto y kanemoto cost benefit analysis and the second best land use for transportation journal of urban economics 4 1977 483 503 and arnott r arnott unpriced transport congestion journal of economic theory 21 1979 294 316 brueckner extrapolated this narrow theoretical result to real cities j brueckner urban sprawl diagnosis and remedies international regional science review 23 2000 160 179 we show that if there is no cross commuting between city and suburb first best efficient tolls on traffic can reduce congestion and total travel cost by shifting worker residents from the city to the suburbs causing urban expansion then planned urban boundaries of any stringency are not a second best policy because they induce people to relocate to more congested areas with cross commuting boundaries of any stringency can be inefficient even when tolls shrink cities as boundaries do little but tolls do a lot to reduce inefficient suburb to city commuting we also show that when the urban radius is limited by a natural boundary then growth boundaries of any stringency are inefficient

second best policies for congestion externalities abstract this is the third in a series of three articles on the topic of congestion externalities we use an urban general equilibrium model to test the efficiency of several second best policies for congestion externalities the most efficient second best policy is a program of land use controls the program generates a welfare gain of 3 38 per household per week a unit tax on commuting is a less efficient policy with a welfare gain of 1 15

the efficiency and distributional impacts of alternative anti sprawl policies this paper develops an analytical and numerical general equilibrium model to compare the efficiency and distributional impacts of development taxes urban growth boundaries property taxes and gasoline taxes from an overall efficiency perspective development taxes and urban growth boundaries are equivalent instruments and the most effective anti sprawl policies if the choice of anti sprawl instruments is influenced by distributional considerations our results suggest the preferred instrument is closely related to the location of land we present distributional impacts of the four policies at the urban city core the urban suburbs and rural area

second best road taxes in polycentric networks with distorted labor markets this paper examines the interaction of road taxes with spatially invariant labor taxation in a polycentric network it derives analytical expressions for the network counterparts of the traditional double dividend effects i e pigouvian tax interaction and revenue recycling effects and computes them under different policy regimes the analysis reveals a series of conditions under which a system of cordons around the major nodes of a network might be more efficient than marginal external cost pricing with a high elasticity of labor supply and limited public transport coverage it is shown that the pigouvian tax rule might reduce welfare even when the generated revenue is used to finance labor tax cuts

optimal policies in cities with congestion and agglomeration externalities congestion tolls labor subsidies and place based strategies abstract this paper develops a spatial general equilibrium model that accommodates both congestion and agglomeration externalities while firms and households land use decisions are endogenous across continuous space focusing on the interaction between externalities and land use patterns we examine the efficiencies of first best policies and second best pricing and place based strategies using numerical simulations a first best policy must combine both pigouvian congestion tolling pct and pigouvian labor subsidies pls instruments or design an optimal toll or subsidy internalizing agglomeration externalities or congestion externalities we also examine second best pricing policies if only one instrument is adopted congestion pricing policies alone e g a partial pct or a flat rate toll can improve social welfare only in heavy congestion cities and their welfare gains may be insignificant e g below 10 of the welfare improvement achieved by first best policies in contrast second best labor subsidy policies alone are a more effective alternative to first best policies as to place based policies the firm cluster zoning fcz regulation is more efficient than the urban growth boundary ugb policy ugbs only have small effects on the agglomeration economy but could worsen land market distortions via residential rent escalation effects these findings suggest that it is important to internalize business land use decisions and relax monocentricity assumptions in order to appreciate the interplay of both urban externalities since spatial adaptations to policy interventions can distort system efficiencies

economies of scale and self financing rules with non competitive factor markets abstract when a firm or public enterprise prices output at marginal cost its profits are related to the degree of local scale economies in its cost function i show that contrary to common belief this result holds even when scale economies are affected by a rising factor supply curve thus marginal cost pricing may be profitable even with constant returns to scale examples are provided for a monopsonist both with and without price discrimination and for a case such as highways where congestion prone inputs are supplied by users court rulings governing land purchase for highways illustrate the applicability of the results

optimal cordon pricing abstract this paper presents a simple spatial model of traffic congestion for a monocentric city to investigate the effects of cordon pricing on trip making and congestion level in each location optimal cordon pricing is obtained as a combination of the cordon location i e distance of the cordon from the cbd and the amount of toll charged there that maximizes the total social surplus in a city under optimal cordon pricing trips originating from locations inside the cordon are under priced those just outside the cordon are over priced and those near the urban fringe are under priced numerical simulations using the parameter values based on japanese data suggest that cordon pricing attains an economic welfare level very close to the first best optimum

telecommuting traffic congestion and agglomeration a general equilibrium model abstract we develop a fully closed general equilibrium model of a monocentric city in which land is allocated to production housing and roads cbd workers and telecommuters are imperfectly substitutable in production cbd workers contribute to the cbd s agglomeration economies but cause traffic congestion in commuting telecommuters do not cause congestion and do not contribute to agglomeration the effects of telecommuting on the urban economy and land use pattern are studied the first best optimal policy in the presence of agglomeration economies congestion and telecommuting is derived and its impacts are compared with the effects of different second best policies

two tier pricing of shared facilities in a free entry equilibrium we explore how well the market will provide shared facilities which are subject to congestion it is usually efficient to have multiple facilities because it is more efficient to spend resources on facilities than to endure crowding costs we assume firms can charge a membership price and a visit price we present a symmetric nash equilibrium in these two prices we show that ifthe number offirms is large the membership price will be small thus the membership price is a measure of market power when entry occurs in response to positive profit but such that entry is deterred by the prospect of negative profit in a symmetric nash equilibrium the endogenous number offirms is bounded below by one fewer than the efficient number thefees paid by a client converge to an appropriately defined competitive price as the economy is replicated

congestion land use and job dispersion a general equilibrium model abstract in dispersed cities congestion tolls would drive up central wages and rents and would induce centrally located producers to want to disperse closer to their workers and their customers paying lower rents and realizing productivity gains from land to labor substitution but the tolls would also induce residents to want to locate more centrally in order to economize on commuting and shopping travel in a computable general equilibrium model we find that the centralizing effect of tolls on residences dominates on the decentralizing effect of tolls on firms causing the dispersed city to have more centralized job and population densities under stylized parameters we find that efficiency gains from levying congestion tolls on work and shopping travel are 3 0 of average income about 80 of such gains come from road planning and 20 from tolls

wage and rent capitalization in the commercial real estate market abstract in this paper we develop three simplified models of the commercial land market within a two center metropolis in each model we focus on how exogenous differences in production costs between centers are capitalized into differences in commercial space rents and wages we show that in a competitive land market wages must account for most of the capitalization as zoning or density regulations limit commercial development at the most advantageous center space rent differences begin capturing more and wage differences less locational value we conclude that the simple application of hedonic theory to the commercial real estate market may be quite misleading

a general equilibrium model with agglomerative economies and decentralized employment abstract the standard urban general equilibrium model is extended in two ways first the central part of the city is occupied by the officer sector the office sector is subject to agglomerative economies arising from the need for face to face contact second residents choose between two employment areas in addition to the employment opportunities in the centralized office sector employment opportunities exist in a decentralized manufacturing sector the model is used to explore the general equilibrium effects of zoning policies

the city network paradigm measuring urban network externalities in recent years network behaviour has been analysed extensively as the emerging model for economic growth by network behaviour a metaphor for co operative behaviour among individuals corporate

optimal and equilibrium membership in clubs in the presence of spillovers abstract this paper treats a partial equilibrium club economy in which clubs impose positive or negative externalities on one another both spillovers in congestable good and crowding are studied it is shown that an increase the relative strength of the first type of spillover may result in either an increase or decrease in the optimal club size and public good levels spillovers in crowding on the other hand have a definite effect on the optimal membership and production of public good these optimal outcomes are then compared to nash equilibrium club size and public good provision when clubs are established by profit maximizing entrepreneurs instead of a social planner

efficiency equilibrium and exclusion when the poor chase the rich using a simple adverse selection model we characterize equilibrium when the rich chase the poor if communities are established by competitive entrepreneurs the equilibrium exists is unique and is efficient it involves either complete separation or complete pooling different income groups may rank these qualitative outcomes differently we show how restrictions imposed by a central government may alter the nature of equilibrium such restrictions may be explained as the choice of a low income majority altering the equilibrium to the pooling outcome which they prefer

the optimal subsidy on electric vehicles in german metropolitan areas a spatial general equilibrium analysis abstract e mobility and diffusion of electric vehicles have become a major policy issue in many countries for example the german federal government pursues the strategy of achieving one million electric vehicles by 2020 in this paper we examine whether it is optimal to subsidize the use of electric vehicles by granting electric power subsidies and how large the corresponding optimal rate is we first analytically derive the optimal power tax in a spatial model of a city with two zones where commuting carbon emissions endogenous labor supply fuel and power taxes are considered it is shown that in a spatial urban environment the optimal tax rate depends in particular on transport related externalities tax interaction effects and redistribution effects working via the urban land market second we extend the model to a full spatial general equilibrium model and employ simulations to calculate sign and size of the optimal tax subsidy rate this model is calibrated to a typical german metropolitan area the results show that electric vehicles should not be subsidized but taxed the results are robust with respect to changes in the willingness to adopt electric vehicles the costs of driving electric vehicles and even if emissions of electric vehicles are zero

traffic congestion s economic impacts evidence from us metropolitan regions traffic congestion alleviation has long been a common core transport policy objective but it remains unclear under which conditions this universal byproduct of urban life also impedes the economy using panel data for 88 us metropolitan statistical areas this study estimates congestion s drag on employment growth 1993 to 2008 and productivity growth per worker 2001 to 2007 using instrumental variables results suggest that congestion slows job growth above thresholds of approximately 4 5 minutes of delay per one way auto commute and 11 000 average daily traffic adt per lane on average across the regional freeway network while higher adt per freeway lane appears to slow productivity growth there is no evidence of congestion induced travel delay impeding productivity growth results suggest that the strict policy focus on travel time savings may be misplaced and instead better outlooks for managing congestion s economic drag lie in prioritising the economically most important trips perhaps through road pricing or in providing alternative travel capacity to enable access despite congestion

the use of performance measures in incentive contracting the strength of incentives used in an organization and the productivity of employees that results from these incentives depend to a large degree on the characteristics of the performance measures available to the organization some employees work under high powered explicit incentive contracts while others have no explicit incentive contracts at all the ability of agency theory to predict the pattern of incentive provision in organizations has not been very impressive and the divergence between the prescriptions of agency theory and the actual practice of firms has been widely noted this paper along with both other papers in this session edward p lazear 2000 canice prendergast 2000 attempts to fill some of the gap between theory and practice i examine the characteristics of performance measures those data on which explicit incentive contracts are based to understand how firms use incentive contracting and to predict the use of incentives in practice