Scandinavian Working Papers in Economics

Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

No 2009/3: Congested Interregional Infrastructure, Road Pricing and Regional Labour Markets

David Philip McArthur (), Inge Thorsen () and Jan Ubøe ()
Additional contact information
David Philip McArthur: Stord/Haugesund University College, Postal: Stord/Haugesund University College , P.O. Box 5000, N-5409 Stord, Norway
Inge Thorsen: Stord/Haugesund University College, Postal: Stord/Haugesund University College , P.O. Box 5000, N-5409 Stord, Norway
Jan Ubøe: Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Finance and Management Science, Helleveien 30, N-5045 Bergen, Norway

Abstract: Traffic congestion and the policies to combat it have been studied extensively. However, most studies neglect the labour market impacts of congestion. Many also fail to account for the simultaneity between commuting and migration. This paper models impacts such as unemployment disparities, changes in commuting flows and changes in the flow of migrants by adopting an agent based simulation approach. This approach has the strength that it allows the simultaneous consideration of commuting, migration and labour force participation decisions. The results obtained have important theoretical and policy implications and show how an "optimal" charge may, in fact, be sub-optimal.

Keywords: Congestion; Road pricing; Agent-based approach; Spatial interaction; Infrastructure investment

JEL-codes: J61; R12; R23; R41; R48

24 pages, April 14, 2009

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