Second-Best Regulation of Road transport Externalities

Second-Best Regulation of Road transport Externalities

The paper examines the welfare characteristics of second-best alternatives to first-best differentiated road pricing, when it is not possible to achieve optimal tax differentiation. The optimal second-best fee is found to be a weighted average of the first-best differentiated fees, the weights depending on factors such as elasticities and group sizes. The welfare effects of second-best regulation are evaluated.

Share Content

Share on facebook
Facebook
Share on google
Google+
Share on twitter
Twitter
Share on linkedin
LinkedIn

Related Articles