Dynamic Congestion and Urban Equilibrium

Tinbergen Institute Discussion Paper 12-137/VIII

30 Pages Posted: 10 Dec 2012

See all articles by Sergejs Gubins

Sergejs Gubins

VU University Amsterdam - Department of Spatial Economics

Erik T. Verhoef

VU University Amsterdam - Department of Spatial Economics; Vrije Universiteit Amsterdam, School of Business and Economics; Tinbergen Institute

Date Written: December 7, 2012

Abstract

We consider a monocentric city where a traffic bottleneck is located at the entrance of the central business district. The commuters' choices of the departure times from home, residential location, and lot size, are all endogenous. We show that elimination of queuing time under optimal road pricing induces individuals to spend more time at home and to have larger houses, causing urban sprawl. This is opposite to the typical results of urban models with static congestion, which predict cities to become denser with road pricing.

Keywords: dynamic traffic congestion, urban equilibrium, road pricing, bottleneck model, monocentric model

JEL Classification: D62, R21, R41, R48

Suggested Citation

Gubins, Sergejs and Verhoef, Erik T., Dynamic Congestion and Urban Equilibrium (December 7, 2012). Tinbergen Institute Discussion Paper 12-137/VIII, Available at SSRN: https://ssrn.com/abstract=2187253 or http://dx.doi.org/10.2139/ssrn.2187253

Sergejs Gubins (Contact Author)

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Erik T. Verhoef

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 020 4446094 (Phone)
+31 020 4446004 (Fax)

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

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