Topic: 7.2 traffic Congestion

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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.

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Road Congestion Pricing: When is it a Good Policy?

This paper makes use of a model to investigate two objections to road congestion pricing: it may be inequitable and it generates perverse incentives for governments. The paper investigates how different congestion delay functions and different mixes of traffic affect these objections. The first is sensitive to these features; the second is more pervasive.

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