Heterogeneous Households’ Choices of Departure Time and Residential Location in a Multiple-origin Single-destination Rail System: Market Equilibrium and the First-best Solution

Konagane, Joji and Kono, Tatsuhito (2021): Heterogeneous Households’ Choices of Departure Time and Residential Location in a Multiple-origin Single-destination Rail System: Market Equilibrium and the First-best Solution.

Abstract

This paper explores heterogenous commuters’ train choices with different arrival times and residential locations in a city composed of a single CBD and multiple residential zones. First, we analyze the relation between the cost of train overcrowding and train choice, given three residential location patterns according to income level, which are discussed in Fujita (1989) and Tabuchi (2019). Next, we analyze the necessary conditions for the existence of the residential location patterns on the basis of the relation between train overcrowding and train choice in equilibrium. The obtained necessary conditions depend on the values of time, housing lot sizes, and the overcrowding costs. The overcrowding costs depend on the choices of trains with different arrival times in equilibrium. Finally, in quantitative analysis, we showhowmuch the socialwelfare improves due to the first-best congestion fares, depending on the residential location patterns. In any residential pattern, households with the lowest income increase their utilities the most among all households with different incomes, whereas households with the highest income lose their utilities.

• Item Type: MPRA Paper
• Language: English
• Keywords: Train overcrowding; Schedule delay costs; Heterogeneous households; Muth condition; Congestion fares
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H21 - Efficiency ; Optimal Taxation; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics

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