almost budget balanced vcg mechanisms to assign multiple objects subsidy free vcg mechanisms assign p identical objects to n agents the efficiency loss is the largest ratio of budget surplus to efficient surplus over all profiles of non negative valuations the smallest efficiency loss l n p satisfies l n p l n n2 43n if pn is bounded away from 12 l n p converges to zero exponentially in n participation is voluntary in the optimal mechanism achieving l n p if p 1 but not if p 2 among voluntary mechanisms the optimal efficiency loss is not significantly larger than l n p if pn 12 but it does not converge to zero in n if pn 12

the impact of political majorities on firm value do electoral promises or friendship connections matter this paper simultaneously estimates the impact of political majorities on the values of firms that would benefit from the platforms of the two main candidates at the 2007 french presidential election segolene royal and nicolas sarkozy and of those that are ruled or owned by sarkozy s friends we use prediction market data to track each candidate s victory probability and investigate how this relates to firms abnormal returns our estimates suggest that the value of firms that would likely benefit from the platforms of royal and sarkozy changed by 1 and 2 respectively with the candidates victory probabilities and that firms connected to sarkozy out performed others by 3 due to his election

are policy platforms capitalized into equity prices evidence from the bush gore 2000 presidential election abstract this paper tests for the capitalization of policy platforms into equity prices using a sample of 70 firms favored under bush or gore platforms during the 2000 u s presidential election two sources of daily data during the six months leading up to the election are incorporated firm specific equity returns and the probability of a bush victory as implied by prices from the iowa electronic market for this group of politically sensitive firms the daily baseline estimates demonstrate that platforms are capitalized into equity prices under a bush administration relative to a counterfactual gore administration bush favored firms are worth 3 more and gore favored firms are worth 6 less implying a statistically significant differential return of 9 estimates based on weekly returns are even stronger suggesting a differential return of 16 the most sensitive sectors include tobacco worth 13 more under a favorable bush administration microsoft competitors worth 15 less under an unfavorable bush administration and alternative energy companies worth 16 less under an unfavorable bush administration a corresponding analysis of campaign contributions which allows for heterogeneity in the importance of policy platforms to the firms supports the baseline estimates

land use and density in cities with congestion abstract it was well documented that monocentric spatial models with congestion require driving tolls to generate market efficiency because driving and location are equivalent tolling congestion is the same as regulating density this paper shows that internalizing the congestion externality always requires upward adjustments to market density which are greatest at the urban center this holds whether or not transportation capacity is optimally provided simulations suggest optimal cities should have central densities that are orders of magnitude greater than market cities

uncertainty and the timing of an urban congestion relief investment the no land case we analyze the impact of population uncertainty on the socially optimum timing of a congestion relief project in a linear monocentric city with fixed boundaries where congestion pricing cannot be implemented this project requires time to bear fruit but no urban land under certainty we show that utility maximization is roughly equivalent to a standard benefit cost analysis bca under uncertainty we derive an explicit optimal threshold for relieving congestion when the urban population follows a geometric brownian motion if the time to implement the project is short we show analytically that deciding on the timing of congestion relief based on a bca could lead to acting prematurely the reverse holds if project implementation is long and uncertainty is large enough

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

worst case optimal redistribution of vcg payments in multi unit auctions abstract for allocation problems with one or more items the well known vickrey clarke groves vcg mechanism aka clarke mechanism generalized vickrey auction is efficient strategy proof individually rational and does not incur a deficit however it is not strongly budget balanced generally the agents payments will sum to more than 0 we study mechanisms that redistribute some of the vcg payments back to the agents while maintaining the desirable properties of the vcg mechanism our objective is to come as close to budget balance as possible in the worst case for auctions with multiple indistinguishable units in which marginal values are nonincreasing we derive a mechanism that is optimal in this sense we also derive an optimal mechanism for the case where we drop the non deficit requirement finally we show that if marginal values are not required to be nonincreasing then the original vcg mechanism is worst case optimal

a solomonic solution to the problem of assigning a private indivisible good a benevolent planner wishes to assign an indivisible private good to n claimants each valuing the object differently individuals have quasi linear preferences therefore the possibility of transfers is allowed a second best efficient mechanism is a strategy proof and anonymous mechanism that is not pareto dominated by another strategy proof and anonymous mechanism in this context we identify three conditions that are necessary and together with voluntary participation sufficient for a mechanism to be second best efficient this set includes mechanisms that destroy the good at certain profiles for domains comprising two individuals we provide an explicit characterization of the family of second best efficient mechanisms

bottleneck congestion and residential location of heterogeneous commuters this study examines the effects of bottleneck congestion and an optimal time varying congestion toll on the spatial structure of cities we develop a model in which heterogeneous commuters choose departure times from home and residential locations in a monocentric city with a bottleneck located between a central downtown and an adjacent suburb we then demonstrate that commuters sort themselves temporally and spatially on the basis of their value of travel time and their flexibility furthermore we reveal that introducing an optimal congestion toll alters the urban spatial structure which contrasts with the previous literature we further demonstrate through an example that congestion tolling can cause the city to physically expand outward which helps rich commuters but hurts poor commuters

efficient collective decision making marginal cost pricing and quadratic voting we discuss the mechanisms related to quadratic voting from vickrey s counter speculation mechanism and his second price auction through the family of groves mechanisms and its most notable member the clarke mechanism to the expected externality mechanism goeree and zhang s mechanism the groves ledyard mechanism and the hylland zeckhauser mechanism we show that each mechanism that involves collective decisions has a quadratic aspect and that all of the mechanisms that we discuss are applications of the fundamental insight that for a process to be efficient all parties involved must bear the marginal social costs of their actions

election uncertainty economic policy uncertainty and financial market uncertainty a prediction market analysis abstract we examine the relationship between election uncertainty economic policy uncertainty and financial market uncertainty in a prediction market analysis covering seven us presidential election campaigns we argue theoretically that changes in the incumbent party re election probability should be a key driver of changes in policy uncertainty consistent with this theory we find that a large portion of changes in financial uncertainty in the final stages of election campaign seasons is explained by changes in the probability of the incumbent party getting re elected our findings suggest that the incumbent party election probability derived from prediction markets is an important measure of economic policy uncertainty in the days leading up to us elections

implementation of the thompson mechanism this paper reconsiders the largely overlooked thompson insurance mechanism for public choice the mechanism s apparent defects can be remedied by a multi part mechanism that generates necessary information and corrects potential errors the added parts are a a sample of the population of eligible voters who prepare a program for all voters approval and b the vickrey clarke groves pivot mechanism one can use classical statistical methods to draw valid inferences from a population sample about the entire electorate preserving incentive compatibility and permitting efficient outcomes

aggregable price taking firms abstract nonlinear quantity aggregation rules are examined for price taking firms facing disparate prices the class of aggregable firm level technologies is shown to be characterized by a generalization of the gorman polar form restricted profit function examples are constructed to show how this nonlinear aggregation problem may be applied in empirical settings

optimality of a competitive equilibrium in a small open city with congestion abstract consider a small spatial economy with a congestion externality in the public transportation sector we prove that the competitive equilibrium allocation coincides with the social optimum allocation despite the presence of the congestion externality to this end we first specify a set up conditions for a competitive equilibrium allocation and then we find another set of conditions for social optimality by comparing the two set of conditions we prove that the competitive allocation is compatible with the social optimal allocation we would like to emphasize the fact that no optimal external toll such as the optimal congestion toll collected by a transportation authority is required to attain the optimal allocation our privately owned and selfish profit maximizing transportation companies end up with charging the price exactly equivalent to the optimal toll

the economic value of military connections in turkey can financial connections to the military provide economic value in democratic environments we address this question by studying whether firms in which the turkish military had a controlling financial interest earned abnormally high stock returns on the istanbul stock exchange our findings from event studies are that this is indeed the case we infer that militaries can retain substantial power to influence economic policy from behind the scenes even after formally transferring it to democratically elected leaders the paper contributes to the literature in public choice by demonstrating econometrically that the military can be a major rent seeking actor even in democratic environments

commuting congestion and employment dispersal in cities with mixed land use abstract for centuries cities have been modeled as having centered employment scarce access to which generates land rent this paper first presents some new empirical evidence that in us cities actual employment turns out to be almost as dispersed as residences this range of urban forms is generated with analytic ease in a model that assumes land can have mixed rather than exclusive use at any location the model has firms trading off a central agglomeration force against the lower wages that accompany shorter commuting distances in peripheral locations at one extreme with very high agglomerative forces employment is approximately centered with long commute distances and high congestion levels at the other extreme lower agglomerative forces lead to employment that is completely dispersed commute distances of zero and the absence of congestion maximizing output minus congestion never leads to a pattern of land mixing where employment is fully dispersed a market model however often does if the mix at each location is based on the relative magnitude of the land rent offered from residential as opposed to commercial uses

spatially variable property tax and optimal tax composition in congested monocentric cities george pigou ramsey and strotz unified abstract we explore the optimal spatial structure of the property tax in a monocentric city with transportation congestion to show how the availablity of revenue instruments impacts the properties of the optimal property tax we discuss three regimes with different combinations of a head tax congestion tolls and property tax in each regime the tax composition is optimally determined to finance a predetermined expenditure under the first regime with all the three taxes available the first best allocation is achievable only when the property tax is unused under the second regime where only head and property taxes are available a spatially variable property tax substitutes for the unavailable congestion tolls the head tax or subsidy fills the gap between the property tax revenue and the predetermined expenditure moreover property tax is negative positive close to the city center boundary under the third regime where only property tax is available the role of the property tax is twofold to substitute for the unavailable congestion tolls and to finance the predetermined expenditure in general for both roles the optimal tax rates are spatially variable furthermore if its role as a substitute for congestion tolls dominates its other role the property tax may be negative close to the boundary

the demand revealing process to distribute the surplus contrary to established frequently repeated proposition that its budget surplus cannot be distributed to taxpayers without disturbing the incentive compatibility of the demand revealing process drp the surplus can be distributed by reapplying the key concept of the drp there will remain an aggregate refund error that in a bayesian sense is random with zero mean and which vanishes o 1 n 2 as the economy becomes large through replication to dela with income effects when one does not restrict the domain of the mechanism to separable utility functions i suggest a variation of the drp that preserves its incentive compatibility wgeb n is finite

zoning first best second best and third best criteria for allocating land for roads this paper elaborates on the cost benefit criteria for land uses in an urban setting and on the bias which results from use of market data rather than true shadow prices in the calculation this bias has been discussed extensively in the urban economics literature especially in response to the studies of solow and vickrey 7 and solow 6 progress has been made especially by kanemoto 3 arnott and mackinnon 2 amott l and pines and saclka 151 however because of the different underlying assumptions it is difficult to evaluate and compare some of the seemingly conflicting results reported in these works the purpose of this paper is to reformulate the issues using a systematic exposition to distinguish among various cost benefit calculations and policy regimes and to derive concisely the main results with some useful extensions the cost benefit criteria evaluated in this paper refer to three types of decision making

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

price aggregation when price taking firms prices vary in many cases heterogeneous prices occur in price taking environments in empirical work an aggregate price index is often created from such prices and used to explain aggregate supply and derived demands we show that consistent aggregation places strong restrictions on functional forms which may be used to describe behaviour unlike the case of aggregation of consumer income but similar to the case of aggregation of wages these functional forms are inconsistent with standard microtheory

incorporating land use and pricing policies for reducing car dependence analytical framework and empirical evidence this article develops an analytical framework to connect the theories of market and planning failures with the reasoning of incorporating land use and pricing policies for reducing driving and car

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

cordon pricing and land use regulation this study explores the simultaneous imposition of cordon pricing and land use regulations in a continuous and closed monocentric city with homogeneous households results reveal the optimal level of a single cordon toll and its location and the optimal floor area ratio far regulation clarifying what distortions remain in the existence of cordon pricing and far regulation among other results this paper shows that with an optimal cordon toll far regulation should alternate between a minimum and a maximum regulation both inside and outside the cordon line

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

optimal vcg mechanisms to assign multiple bads for the problem of assigning economic bads for example costly tasks or undesirable objects vickrey clarke groves vcg mechanisms achieve efficient allocations via money transfers however they can produce arbitrarily large budget surpluses or deficits we construct a performance index for a vcg mechanism to measure its budget surplus and deficit in the worst case using this index we develop mechanisms whose surpluses or deficits vanish as the number of participants increases for both cases of bads and goods we find that individual rationality creates an asymmetry between surplus and deficit particularly in the case of bads when the number of agents is large enough a minute amount of deficit can replace unit surplus to achieve a budget balance for the case of economic goods unit surplus can only be replaced with unit deficit regardless of individual rationality this result shows that the model with bads differs fundamentally from the model with goods

patterns of growth in chinese cities implications of the land lease abstract a special feature of china s housing market is land use rights in the form of land leasehold contracts granted by the government we consider an equilibrium model in which a representative developer may choose to redevelop existing centrally located housing or to develop new housing at the periphery of the city we show that as the city grows the land leasehold system results in the city center being developed less intensely and more land being used on the outskirts of the city when compared to a fee simple environment thus cities in china are likely to be relatively more spread out with city centers relatively older than would be the case with fee simple ownership our model suggests that excess residential land use is about 6 percent in addition compared with the ownership case housing supply will grow more quickly in the near future but more slowly later on during the transition of the chinese economy parallel to the supply growth pattern equilibrium price grows relative slowly in the near future but more quickly later on while we focus on residential uses we believe our model can be applied to other land uses

maximizing social welfare in congestion games via redistribution it is well known that efficient use of congestible resources can be achieved via marginal pricing however payments collected from the agents generate a budget surplus which reduces social welfare we show that an asymptotically first best solution in the number of agents can be achieved by the appropriate redistribution of the budget surplus back to the agents

real estate regulations in accra some macroeconomic consequences ghana has been one of the most rapidly growing economies in sub saharan africa this growth has been aided by ghana s improving policy environment in light of this the paper addresses the question of why given its higher level of per capita income and relatively strong growth the housing conditions of the poor in accra are considerably worse than those in a number of other african cities with lower incomes there are not many data available to answer this question so the method is indirect and takes two approaches first a variant of the monocentric city model is used to calculate accra s housing supply elasticity relative to those of other similarly sized african cities the model suggests that housing supply responsiveness is considerably lower in accra a result consistent with the observed higher housing costs secondly a number of traditional housing demand and reduced form equations are estimated for accra and the other cities this allows the formation of a quantitative judgment about accra

the effect of population density road network density and congestion on household gasoline consumption in u s urban areas abstract this paper applies both semiparametric and parametric approaches to explore the effect of population density freeway road density and congestion on household gasoline consumption in u s urban areas while controlling for household demographic and economic characteristics regression results indicate that households living in those urban areas with higher freeway densities higher levels of congestion or lower population densities consume more gasoline

policy uncertainty electoral securities and redistribution this paper investigates how uncertainty about the adoption of a redistribution policy affects political support for redistribution when individuals can trade policy contingent securities in the stock market we show that the demand for redistribution is always smaller than in the case where no policy insurance market is available consistent with the empirical evidence our analysis implies that in economies with well developed financial markets the level of redistribution decreases with the level of participation in these markets and with income inequality we show that the existence of a policy insurance market may increase future expected inequality even if a majority of individuals are redistributing resources through private transfers

the general equilibrium effects of congestion externalities abstract this is the second in a series of three articles on the topic of congestion externalities we use an urban general equilibrium model to compute two types of cities the market equilibrium city in which congestion externalities occur and the optimum city the optimum city has a more dispersed distribution of employment and a more concentrated distribution of residence if the population of the city is fixed the optimum pricing of transportation generates a per capita welfare gain of 3 78 per week if the population of the city is endogenous the internalization of congestion externalities causes the city to grow

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

winning or losing from dynamic bottleneck congestion pricing the distributional effects of road pricing with heterogeneity in values of time and schedule delay abstract this paper analyses the efficiency and distributional impacts of congestion pricing in vickrey s 1969 dynamic bottleneck model of congestion allowing for continuous distributions of values of time and schedule delay we find that congestion pricing can leave a majority of travellers better off even without returning the toll revenues to them we also find that the consumer surplus losses or gains from tolling are not strictly monotonic in the value of time because they also depend on the value of schedule delays the greatest losses are not incurred by drivers with the lowest value of time but by users with an intermediate value of schedule delays and the lowest value of time for that value of schedule delays for second best pricing with an untolled alternative the pattern of distributional effects is quite similar to that for first best pricing in contrast with results from prior static models users who are indifferent between the two alternative routes are not the ones who gain least from this type of second best pricing our results suggest that in assessing the distributional impacts of road congestion pricing it is important to take into account both the distribution of the value of time and of the value of schedule delays as well as the dynamics of departure time choice

the existence and uniqueness of optimal pollution policy in the presence of victim defense measures abstract it is to be expected that rational people defend themselves against pollution externalities at the very least through spatial separation from the source but even in the simplest models defensive behaviour generates nonconvexities multiple optima and inconclusive policy guidance this raises serious questions for the theory of environmental policy which have been largely ignored this paper derives a sufficient condition for a uniquely optimal emissions level in the presence of defensive activity the condition has an intuitive and in principal empirically testable interpretation two strategies for implementation are discussed an iterative tax rule and a non iterative demand revealing mechanism

urban economic theory land use and city size this book examines the economic reasons why people choose to live where they live and develops through analysis of the bid rent function a unified theory of urban land use and city size the first part of the book explicates the basic theory of urban land use and optimal city size residential location behavior of households is examined in a microeconomic framework and equilibrium and optimal patterns of residential land use are discussed the corresponding equilibrium and optimal city sizes are studied in a variety of contexts part two extends the classical theories of von thunen and alonso with the addition of externality factors such as local public goods crowding and congestion and racial prejudice the rigorous mathematical approach and theoretical treatment of the material make urban economic theory of interest to researchers in urban economics location theory urban geography and urban planning

congestion in a city with a central bottleneck we consider dynamic congestion in an urban setting where trip origins are spatially distributed all travelers must pass through a downtown bottleneck in order to reach their destination in the cbd each traveler chooses departure time to maximize general concave scheduling utility we find that at equilibrium travelers sort according to their distance to the destination the queue is always unimodal regardless of the spatial distribution of trip origins we construct a welfare maximizing tolling regime which eliminates congestion all travelers located beyond a critical distance from the cbd gain from tolling even when toll revenues are not redistributed while nearby travelers lose we discuss our results in the context of acceptability of tolling policies

trading and voting complete financial markets transform the political choice between candidates with different redistribution policies if redistribution policies do not affect aggregate wealth then financial trade implies that wealth considerations have no effect on voting and so do not affect who wins however an election in which one candidate would redistribute results in redistribution and redistribution is the same whether or not he wins furthermore he proposes and if elected carries out more redistribution than he prefers if redistribution policies do affect aggregate wealth then everybody expects more wealth if the candidate with the higher aggregate wealth policy wins

asymptotic efficiency of the demand revealing mechanism abstract it is shown that the demand revealing mechanism creates only a negligibly small undesired deficit when the number of participants in the decision group in question is sufficiently large since the size of deficit is a measure of inefficiency and since the former is inevitable the states result demonstrates the approximate optimality of the mechanism

can we insure against political uncertainty evidence from the u s stock market i show that shares currently traded on u s stock markets can be used to hedge political uncertainty focusing on the 2000 u s presidential election i construct two presidential portfolios composed of selected stocks anticipated to fare differently under a bush versus a gore presidency to construct these portfolios i use data on campaign contributions by publicly traded corporations and identify the major contributors on each side using daily observations for the six months before the election took place i show that the excess returns of these portfolios with respect to overall market movements are significantly related to changes in electoral polls

the energy implications of city size and density abstract this paper develops a new open city urban simulation model capable of showing the urban form and energy consumption effects of variation in city size the model is able to consider city size differences caused by wage and amenity differentials both with and without housing and land use regulation the surprising conclusion is that per capita energy use is relatively invariant to city size when growth is driven by wages but falls modestly with growth induced by rising amenity common land use policies specifically density limits and greenbelts can positively or negatively affect both city welfare and energy use

measuring the stringency of land use regulation the case of china s building height limits this paper develops a new approach for measuring the stringency of a major form of land use regulation building height restrictions and applies it to an extraordinary data set of land lease transactions from china our theory shows that the elasticity of land price with respect to the floor area ratio far a building height indicator is a measure of the regulation s stringency the extent to which far is kept below the free market level using a national sample estimation allowing this elasticity to be city specific shows variation in the stringency of far regulation across chinese cities single city estimation for beijing shows that stringency varies with site characteristics

effects of the optimal step toll scheme on equilibrium commuter behaviour this paper derives commuters equilibrium queuing costs and equilibrium schedule delay costs before and after levying the optimal step tolls at a queuing bottleneck dealing with these equilibrium costs technically one can forecast some changes in equilibrium commuter behaviour from the no toll to the optimal step toll cases there is some useful information provided in this paper first the number of commuters who will or will not pay the tolls can be investigated before tolling a queuing bottleneck second all commuters departure time switching decisions from the no toll to the tolled cases can be investigated before tolling third the increased leisure time in the morning to the toll payer due to depart from home later than their original departure times in the no toll case can be investigated before tolling the above information of equilibrium commuter behaviour which the related literature has failed to provide is useful to policy makers if the optimal step toll scheme is considered to be put

the welfare gains from pricing road congestion using automatic vehicle identification and on vehicle meters it is a widely accepted proposition that there is a general underpricing of auto travel in u s cities auto travel imposes a congestion externality with an efficient peak period level estimated at lo 23t per mile on urban freeways small 1121 2 3 but for most urban auto travel tolls consist almost entirely of the gasoline excise tax at a fuel economy of 15 miles per gallon the auto toll implied by the current high gas tax in the united states of 25e per gallon is only 1 7e per mile this is much too low for most peak period travel and even underprices some off peak travel the purpose of this study is to estimate the welfare gains which are possible under different regimes for imposing higher auto tolls in urban areas the three regimes studied are associated with a higher gas tax and systems called automatic vehicle identification and on vehicle metering the framework for the study is a model of a city whose shape is that of a wedge or pie slice of a circle the model s features include

the existence of input and output aggregates in aggregate production functions in this paper we make two contributions to the literature on aggregating inputs and outputs in economy production functions first we present necessary and sufficient conditions for aggregating efficiently allocated goods under general assumptions on the technology second we present a general theorem on the conditions for the existence of aggregates of both efficiently allocated goods and arbitrarily allocated goods we use this theorem to elucidate the role of efficiency in determining the existence of aggregates