Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/146772
Authors: 
Hirte, Georg
Rhee, Hyok-Joo
Year of Publication: 
2016
Series/Report no.: 
CEPIE Working Paper 05/16
Abstract: 
We examine the working mechanisms and efficiencies of zoning (regulation of floor area ratios and land-use types) and fiscal instruments (tolls, property taxes, and income transfer), and extend the instrument choice theory to include the congestion of road and nonroad infrastructure. We show that in the spatial model with heterogeneous households the standard first-best instruments do not work because they trigger distortion of spatial allocations. In addition, because of the household heterogeneity and real estate market distortions, zoning could be less efficient than, as efficient as, or more efficient than pricing instruments. However, when the zoning enacted deviates from the optimum, zoning not only becomes inferior to congestion charges but is also likely to reduce welfare. In addition, we provide a global platform that extends the instrument choice theory of pollution control to include various types of externalities and a wide range of discrete policy deviations for any reasons beyond cost–benefit uncertainties.
Subjects: 
infrastructure congestion
zoning
road tolls
property tax
instrument choice
heterogeneity
Infrastruktur
Verkehrsstau
Zoning
Maut
Grundsteuer
Heterogenität
JEL: 
H21
R52
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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