We study urban structure and traffic congestion of a monocentric city by idealizing its suburb and its core as two zones and then exploring what would happen when they are… Click to show full abstract
We study urban structure and traffic congestion of a monocentric city by idealizing its suburb and its core as two zones and then exploring what would happen when they are connected by a congestible highway and a crowded railway system. We introduce dynamic congestion effect into commuters’ departure-time and mode choice behaviours, and analyse the endogenous interactions between their travel and residential relocation choices. Studies ignoring dynamic departure-time behaviour show an ambiguous effect of transit improvements to the city. However, we find that transit improvement has a definitive impact on city structure: it increases the residents’ equilibrium utility, at a cost of increased suburb land use. We show that it is possible to design Pareto-improving land-use and transit policies which benefit the residents without causing urban sprawl. We provide analytically the existence conditions of such policies and suggest that a high return of land use tax to subsidize transit improvement is required.
               
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