Endogenous Vehicle-Type Choices in a Monocentric City

Kim, Jinwon (2012): Endogenous Vehicle-Type Choices in a Monocentric City. Published in: Regional Science and Urban Economics , Vol. 42, No. 4 (1 July 2012): pp. 749-760.

Abstract

Motivated by several empirical studies showing a positive relationship between residential density and vehicle fuel efficiency chosen by the residents, this paper presents a modified monocentric city model with endogenous vehicle-type choices. Consumers are assumed to explicitly consider driving inconvenience in the choice of vehicle sizes, and the resulting commuting cost is a function of residential density. This vehicle-type choice problem is embedded in an otherwise standard monocentric city model. A convenience-related advantage in less-dense areas makes our bid-rent curve flatter than that in the standard model. Comparative static analyses suggest that an increase in commuting cost per mile, especially from increased unit cost of driving inconvenience, may induce spatial expansion of the city. Since driving inconvenience is lower in less-dense suburbs, the increased unit cost of driving inconvenience pulls people toward suburbs, potentially leading to urban sprawl. Part of comparative static analysis shows how the city's vehicle fuel efficiency depends on the city characteristics such as population and agricultural rent.

• Item Type: MPRA Paper
• Language: English
• Keywords: Monocentric City Model, Vehicle Fuel Efficiency, Driving Inconvenience, Urban Sprawl
• Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R13 - General Equilibrium and Welfare Economic Analysis of Regional Economies; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R14 - Land Use Patterns; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R41 - Transportation: Demand, Supply, and Congestion ; Travel Time ; Safety and Accidents ; Transportation Noise

References

Anas, A., Arnott, R., Small, K., 1998. Urban spatial structure. Journal of Economic Literature 36, 1426-1464.

Arnott, R., 1979. Unpriced transport congestion. Journal of Economic Theory 21, 294-316.

Badoe, D., Miller, E., 2000. Transportation-land use interaction: empirical findings in North America, and their implications for modeling. Transportation Research D 5, 235-263.

Baum-Snow, N., 2007. Did highways cause suburbanization? Quarterly Journal of Economics 122, 775-805.

Baum-Snow, N., 2010. Changes in transportation infrastructure and commuting patterns in U.S. metropolitan areas, 1960-2000. American Economic Review Papers & Proceedings 100, 378-382.

Bento, A.M., Cropper, M.L., Mobarak, A.M., Vinha, K., 2005. The impact of urban spatial structure on travel demand in the United States. Review of Economics and Statistics 87, 466-478.

Boarnet, M.G., Sarmiento, S., 1998. Can land-use policy really affect travel behavior? A study of the Link between non-work travel and land-use characteristics. Urban Studies 35, 1155-1169.

Boarnet, M., Crane, R., 2001. The influence of land use on travel behavior: Specification and estimation strategies. Transportation Research Part A 35, 823-845.

Brownstone, D., Golob, T.F., 2009. The impact of residential density on vehicle usage and energy consumption. Journal of Urban Economics 65, 91-98.

Brueckner, J.K., 1987. The structure of urban equilibria: A unified treatment of the Muth-Mills model. Handbook of Regional and Urban Economics Vol. II, 821-845.

Brueckner, J.K., 2001. Urban sprawl: Lessons from urban economics. Brookings-Wharton papers on urban affairs, Brookings Institution, Washington, D.C., 65-89.

Brueckner, J.K., 2007. Urban growth boundaries: An effective second-best remedy for unpriced traffic congestion? Journal of Housing Economics 16, 263-273.

Brueckner, J.K., Largey, A., 2008. Social interaction and urban sprawl. Journal of Urban Economics 64, 18-34.

Fang, A., 2008. A discrete-continuous model of households' vehicle choice and usage, with an application to the effects of residential density. Transportation Research B 42, 736-758.

Gillingham, K., 2010. How do consumers respond to gasoline price shocks? Heterogeneity in vehicle choice and driving behavior. Working paper.

Glaeser, E.L., Kahn, M.E., 2004. Sprawl and urban growth. Handbook of Regional and Urban Economics Vol IV, 2481-2527.

Glaeser, E.L., Kahn, M.E., Rappaport, J., 2008. Why do the poor live in cities? The role of public transportation. Journal of Urban Economics 63, 1-24.

Kahn, M., 2000. The environmental impact of suburbanization. Journal of Policy Analysis and Management 19, 569-586.

Kim, J., Brownstone, D., 2012. The impact of residential density on vehicle usage and fuel consumption: Evidence from national samples. Working Paper.

Klier, T., Linn, J., 2011. Corporate average fuel economy standards and the market for new vehicles. Federal Reserve Bank of Chicago Working paper.

Levinson, D. M., Kumar, A., 1997. Density and the journey to work. Growth and Change 28, 147-172.

Newman, P., Kenworthy, J.R., 1989. Gasoline consumption and cities: A comparison of US cities in a global survey. Journal of the American Planning Association 55, 24-36.

Newman, P., Kenworthy, J.R., 1999. Costs of automobile dependence: Global survey of cities. Transportation Research Record 1670, 17-26.

Parry, I. W. H., Walls, M., Winston, H., 2007. Automobile externalities and policies. Journal of economic literature 45, 373-399.

Pines, D., Sadka, E., 1985. Zoning, first-best, second-best and third-best criteria for allocating for roads. Journal of Urban Economics 17, 167-183.

Pines, D., Sadka, E., 1986. Comparative statics analysis of a fully closed city. Journal of Urban Economics 20, 1-20.

Riley, J.G., 1974. Optimal residential density and road transportation. Journal of Urban Economics 1, 230-249.

Schimek, P., 1996. Household motor vehicle ownership and use: How much does residential density matter? Transportation Research Record 1552, 120-125.

West, S., 2004. Distributional effects of alternative vehicle pollution control policies. Journal of Public Economics 88, 735-757.

Wheaton, W.C., 1974. A comparative static analysis of urban spatial structure. Journal of Economic Theory 9, 223-237.

Wheaton, W.C., 1977. Income and urban residence: An analysis of consumer demand for location. American Economic Review 67, 620-631.

Wheaton, W.C., 1998. Land use and density in cities with congestion. Journal of Urban Economics 43, 258-272.