Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 682: Optimal Environmental Road Pricing and Integrated Daily Commuting Patterns
Jessica Coria () and Xiao-Bing Zhang
Additional contact information
Jessica Coria: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O.Box 640, SE 40530 GÖTEBORG, Sweden
Xiao-Bing Zhang: School of Economics, Renmin University of China.
Abstract: Road pricing can improve air quality by reducing and spreading traffic flows. Nevertheless, air quality does not depend only on traffic flows, but also on pollution dispersion. In this paper we investigate the effects of the temporal variation in pollution dispersion on optimal road pricing, and show that time-varying road pricing is needed to make drivers internalize the social costs of both time-varying congestion and time- varying pollution. To this end, we develop an ecological economics model that takes into account the effects of road pricing on integrated daily commuting patterns. We characterize the optimal road pricing when pollution dispersion varies over the day and analyze its effects on traffic flows, arrival times, and the number of commuters by car.
Keywords: Air pollution; Road transportation; Road pricing; Pollution dispersion
27 pages, December 2016
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