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Congestion charges and labour market imperfections: “wider economic benefits” or “losses”?
WSP Analysis & Strategy.
WSP Analysis & Strategy.
WSP Analysis & Strategy.
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2012 (English)Report (Other academic)
Abstract [en]

The presence of distortive taxation and agglomeration benefits in the labour market means that there are benefits and losses not captured by standard cost-benefit analyses of transport policy measures. Recent theoretical analyses have raised concerns that the labour market effects of congestion charges may constitute considerable losses in the form of reduced aggregate labour income, over and above what is captured by the consumer surplus in the standard analysis of congestion charges – possibly to the extent that congestion charges may reduce aggregate social welfare, contrary to conventional wisdom in transport economics. The sign and size of these effects are an empirical question, however. We investigate this issue by estimating the labour income effects of the Stockholm congestion charges, using an estimated relationship between workplace accessibility and labour income. Results show positive effects on labour income, meaning that the “wider economic benefits” of this system are in fact benefits, not losses. It turns out to be crucial that the model accounts for value-of-time heterogeneity in the income/accessibility relationship and in the calculation of generalized travel costs.

Place, publisher, year, edition, pages
Stockholm: Centre for Transport Studies Stockholm, Swedish National Road & Transport Research Institute (VTI), KTH Royal Institute of Technology, S-WoPEc, Scandinavian Working Papers in Economics , 2012. , 19 p.
CTS Working Paper, 2012:4
Keyword [en]
Congestion charging, Journey to work, Cost, Accessibility, Work, Income, Cost benefit analysis, Mathematical model
Keyword [sv]
Trängselavgifter, Arbetsresor, Kostnader, Tillgänglighet, Arbete, Inkomst, Nyttokostnadsanalys, Matematiska modeller
National Category
Research subject
Road: General works, surveys, comprehensive works, Road: Economics
URN: urn:nbn:se:vti:diva-658OAI: diva2:669353
Available from: 2013-12-03 Created: 2013-12-03 Last updated: 2014-06-09Bibliographically approved

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Pyddoke, Roger
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Transport economics Stockholm

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