TY - JOUR
T1 - Optimal regulation on building size and city boundary
T2 - An effective second-best remedy for traffic congestion externality
AU - Kono, Tatsuhito
AU - Joshi, Kirti Kusum
AU - Kato, Takeaki
AU - Yokoi, Takahisa
N1 - Funding Information:
This research was supported by grants from the Ministry of Education, Culture, Sports, Science and Technology (Grant-in-Aid for Scientific Research (C) 22560525 ), which are gratefully acknowledged. The authors are indebted to the editor Yves Zenou and two anonymous referees for helpful comments. Despite assistance from many sources, any errors in the paper remain the sole responsibility of the authors.
PY - 2012/7
Y1 - 2012/7
N2 - This paper numerically evaluates the efficiency of regulations on building size and city size in a congested closed city by comparing welfare gain with that achieved under a first-best toll regime. Results show that whereas the urban growth boundary (UGB) is a poor substitute for the toll regime as expected, an optimal regulation on building size in the presence of a suitably chosen UGB yields significant welfare gain, producing an effective substitute for a first-best toll regime. Moreover, the optimal regulation on the building size requires not only downward adjustment to the market population density at the boundary locations but also upward adjustment at the central locations.
AB - This paper numerically evaluates the efficiency of regulations on building size and city size in a congested closed city by comparing welfare gain with that achieved under a first-best toll regime. Results show that whereas the urban growth boundary (UGB) is a poor substitute for the toll regime as expected, an optimal regulation on building size in the presence of a suitably chosen UGB yields significant welfare gain, producing an effective substitute for a first-best toll regime. Moreover, the optimal regulation on the building size requires not only downward adjustment to the market population density at the boundary locations but also upward adjustment at the central locations.
KW - Congestion
KW - Externalities
KW - Floor area ratio
KW - Toll regime
KW - Urban growth boundary
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U2 - 10.1016/j.regsciurbeco.2012.02.004
DO - 10.1016/j.regsciurbeco.2012.02.004
M3 - Article
AN - SCOPUS:84858714680
SN - 0166-0462
VL - 42
SP - 619
EP - 630
JO - Regional Science and Urban Economics
JF - Regional Science and Urban Economics
IS - 4
ER -
