Commuting Subsidies With Two Transport Modes

20 Pages Posted: 11 May 2007

See all articles by Rainald Borck

Rainald Borck

Humboldt University of Berlin - Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Matthias Wrede

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Institute of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: April 2007

Abstract

We study a simple model of commuting subsidies with two transport modes. City residents choose where to live and which mode to use. When all land is owned by city residents, one group gains from subsidies what the other loses. With absentee landownership, city residents as a group gain at the expense of landowners. Subsidies toward different modes have different effects, however, for instance, in one case, rich automobile drivers suffer from transit subsidies, while poor transit users may benefit from subsidies to automobiles.

Keywords: commuting subsidies, voting, monocentric city

JEL Classification: R14, R48

Suggested Citation

Borck, Rainald and Wrede, Matthias, Commuting Subsidies With Two Transport Modes (April 2007). CESifo Working Paper Series No. 1972, Available at SSRN: https://ssrn.com/abstract=985276

Rainald Borck

Humboldt University of Berlin - Faculty of Economics ( email )

Spandauer Strasse 1
D-10178 Berlin
Germany
49-30-2093-5676 (Phone)
49-30-2093-5697 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Matthias Wrede (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Institute of Economics ( email )

Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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