Nationaløkonomisk tidsskrift,
Nationaløkonomisk Forening

Abstract: We present a partial equilibrium model for road pricing in Denmark. The model analyses the joint problems of the taxation of the congestion externality and the effects on the labour supply. We combine two regulatory instruments, a toll ring and kilometre-based road pricing, with three ways of recycling the revenue (eased income taxes, increased subsidies for public transport and increased tax deductions for commuting). We find that the largest gain would arise from a combination of a toll ring and eased income taxes. Kilometre-based road pricing is less beneficial because the system costs are higher. Furthermore we find support for the hypothesis of weak double dividend but not strong double dividend. The model is inspired by Parry and Bento (2001) and Van Dender (2003) and extended in several ways, most important are the inclusion of several regions, more alternative modes of transportation, regionalised labour supply, modelling of a toll ring, peak/off-peak substitution and the inclusion of system costs.

Keywords: road; pricing

JEL-codes: A10

Language: English

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