The welfare consequences of urban traffic regulations

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• Isis Durrmeyer, Assistant professor, Toulouse School of Economics
• Wednesday 19 October 2022, 13:00-14:00
• Room W4.05 (Cambridge Judge Business School).

If you have a question about this talk, please contact Emily Brown.

We develop a novel structural model to represent individual transportation decisions and the equilibrium road traffic levels and speeds inside a city. The model has two main advantages relative to the existing frameworks. First, it is a micro-founded equilibrium model with a high level of heterogeneity. The model accounts for individual heterogeneity in access to different transportation modes, values of travel time, and schedule constraints. Furthermore, our model considers heterogeneous road congestion technologies across different areas. The second advantage is that all the model parameters are estimated using multiple publicly available data. We apply our model to the Paris metropolitan area to predict the road traffic equilibria under driving restrictions and road tolls and measure each policy’s welfare consequences. Our results suggest that all the policies decrease individuals’ utilities: the benefits of relaxing road congestion and improving car speeds do not offset the losses for individuals from switching to other transportation modes or off-peak hours. However, road tolls raise significant tax revenues that, when they are redistributed to individuals, generate positive total surplus changes. In addition, these policies reduce emissions of global and local pollutants. However, they represent only a small gain once converted into monetary terms using standard social values for these emissions.

This talk is part of the Economics & Policy Seminars, CJBS series.

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• Economics & Policy Seminars, CJBS
• Room W4.05 (Cambridge Judge Business School)

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