Lecture 5- Road Congestion and City Structure Flashcards

1
Q

How many homogenous zones should we think of a city as?

A

3 islands

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

On the bridges separating the islands, is there congestion?

A

There is congestion on the bridges separating the islands.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is urban sprawl?

A

Urban sprawl, also called sprawl or suburban sprawl, is the rapid expansion of the geographic extent of cities and towns, often characterized by low-density residential housing, single-use zoning, and increased reliance on the private automobile for transportation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is urban sprawl in part caused by?

A

The need to accommodate a rising urban population; in many metropolitan areas, it results from a desire for increased living space and other residential amenities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What has urban sprawl also been linked to?

A

Urban sprawl has been linked to increased energy use, pollution, destruction of green areas, traffic congestion and a decline in community distinctiveness and cohesiveness

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the general link between urban development densities and petroleum consumption?

A

More dense areas use less petroleum on average than less dense areas.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What do we allow to happen when we consider a city in a 3 island model?

A

This simplified setting allows to include congestion in the monocentric model in a tractable way.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the 3 islands called?

A
  • Central
  • Midtown
  • Suburban
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Where is the vacant land?

A

On the right of the suburban island

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are the 2 bridges called?

A
  • Midtown bridge
  • Suburban bridge
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Where is the CBD?

A

On the left of the central island.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the exogenous population size?

A

๐‘ = ๐‘›๐‘ + ๐‘›๐‘š + ๐‘›s

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How does everyone commute to the CBD?

A

By using cars

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is true about the sizes of the Central and Midtown islands?

A

They are both limited in size, which is normalised to one

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is true about the size of land in the suburban region? What is true about its elasticity of supply of land?

A

In the Suburban island, there is always free space, and the supply of land is perfectly elastic (ie there is always land available at a given price.) We assume that the price is set to zero.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the travel cost on the suburban bridge?

A

๐‘ก๐‘ (๐‘›๐‘ )

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is the travel cost on the midtown bridge?

A

๐‘ก๐‘š(๐‘›๐‘š + ๐‘›๐‘ )

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the utility function?

A
  • ๐‘ฃ (๐‘ž๐‘™) + ๐‘’๐‘™ where ๐‘™ = ๐‘, ๐‘š, s
  • ๐‘ฃ . increasing and concave
  • ๐‘ž๐‘™ is the size of individual dwelling on island ๐‘™
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What happens to the proceeds of the tolls?

A

They are reinjected back into society

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is the total cost from travelling from midtown to central/

A

๐œ๐‘š + ๐‘ก (๐‘›๐‘  + ๐‘›๐‘š)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Does everyone rent or own their house?

A

They all rent, at either ๐‘Ÿ๐‘ , ๐‘Ÿ๐‘š and ๐‘Ÿs = 0 (exogneous in S)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is the individual budget constraint for someone residing in S?

A

๐‘ฆ + ๐ฟ = ๐‘’๐‘  + ๐œ๐‘š + ๐‘ก๐‘š(๐‘›๐‘  + ๐‘›๐‘š) + ๐œ๐‘  + ๐‘ก(๐‘›s)

23
Q

What is the individual budget constraint for someone residing in M?

A

๐‘ฆ + ๐ฟ = ๐‘’๐‘š + ๐‘Ÿ๐‘š.๐‘ž๐‘š + ๐œ๐‘š + ๐‘ก(๐‘›๐‘  + ๐‘›๐‘š)

24
Q

What is the individual budget constraint for someone residing in C?

A

๐‘ฆ + ๐ฟ = ๐‘’๐‘ + ๐‘Ÿ๐‘.๐‘ž๐‘

25
What does a traffic cost represent?
Congestion
26
What is the first-best toll policy?
๐œ๐‘š >0, ๐œ๐‘  >0 ie all links in the network are tolled
27
What is the Cordon toll (second best policy?)
๐œ๐‘š > ๐œ๐‘  = 0 ie only the link between Midtown and Central is tolled
28
List the 3 equilibrium conditions:
- Utility of an individual invariant with location (as in the standard monocentric model) ๐‘ˆ๐‘ = ๐‘ˆ๐‘š = ๐‘ˆ๐‘  - Space on C and M has to be fully utilized ๐‘›c๐‘žc = 1 ๐‘›๐‘š๐‘ž๐‘š = 1 - Utility maximization (housing/land size) ๐‘ฃโ€ฒ(๐‘ž๐‘–) = ๐‘Ÿ๐‘– ๐‘– = ๐‘,๐‘š,๐‘ 
29
What does ๐‘ฃโ€ฒ(๐‘ž๐‘–) = ๐‘Ÿ๐‘– infer?
Marginal utility = rental price
30
Is v(.) increasing and convex?
It is increasing, but concave not convex
31
What is the surplus gained by an individual of living in the middle area rather than central equal to?
The total transportation costs of commuting to the central region
32
List the order of islands in terms of rent prices.
๐‘Ÿ๐‘  < ๐‘Ÿ๐‘š < ๐‘Ÿc
33
How do we know that ๐‘ž๐‘ < ๐‘ž๐‘š < ๐‘žs
As individuals living further away must gain extra utility from their housing, as although they have to pay transport costs, the condition ๐‘ˆ๐‘ = ๐‘ˆ๐‘š = ๐‘ˆ๐‘  must be satisfied.
34
Is the 3-island model consistent with the monocentric model in its basic predictions? Why?
Yes it is, and this is irrespective of tolls: - Dwelling size increases with distance from centre - Unit price of land (housing) decreases with distance from centre - Density of population decreases with distance from centre
35
What happens to the central island when the toll on the midtown bridge rises?
Price of land in the central region will rise, as the region is more desirable to avoid the rise in travel costs.
36
What happens to the midtown island when the toll on the midtown bridge rises?
M does npt becmoe more attractive to anyone in C or S (who would have to pay that toll anyway), so the population of M falls, as does the price of its land.
37
What happens to the suburban island's population when the toll on the midtown bridge rises?
The effect is generally ambiguous, however under reasonable assumptions on functions and parameters, the effect is negative (reduce suburban population and city size).
38
What happens to the Midtown and Central islands when the suburban bridge toll is implemented?
* The suburban toll raises land prices and population in both central and midtown zones (so, it also makes those areas more densely populated) * So this toll reduces population in suburban zone, ๐‘›๐‘  = ๐‘ โˆ’ ๐‘›๐‘ โˆ’ ๐‘›๐‘š, and the geographical size of the city (sprawl)
39
What is the formula for maximising welfare with respect to tolls? How else can this be written?
- ๐‘€๐‘Ž๐‘ฅ ๐œ๐‘š,๐œ๐‘ ๐‘Š = ๐‘›๐‘๐‘ˆ๐‘ + ๐‘›๐‘š๐‘ˆ๐‘š + ๐‘›๐‘ ๐‘ˆ๐‘  Which using the equal utilities equilibrium condition can be written as ๐‘€๐‘Ž๐‘ฅ๐œ๐‘š,๐œ๐‘  ๐‘(๐‘ฃ(๐‘ž๐‘) โˆ’ ๐‘Ÿ๐‘๐‘ž๐‘ + L)
40
What is the optimal first-best toll on the Midtown bridge?
๐œ๐‘š๐น๐ต = ๐‘กโ€ฒ๐‘š โˆ™ (๐‘›๐‘  + ๐‘›๐‘š)
41
What is the optimal first-best toll on the suburban bridge?
๐œs๐น๐ต = ๐‘กโ€ฒ๐‘š โˆ™ ๐‘›๐‘ 
42
Under first-best pricing. What do the tolls on each bridge equall?
The tolls on each bridge = the marginal external cost of congestion
43
What happens without tolls?
We have excessive congestion on both bridges, as external costs of congestion are ignored by travellers on midtown and suburban bridge.
44
What happens to urban sprawl with no tolls?
The suburban island gets too large as there is a lack of incentive to live in C or M, so urban sprawl becomes excessive.
45
How do tolls help deal with congestion and urban sprawl?
Tolls make people internalise the external cost of congestion, making more individuals live closer to the centre, reducing urban sprawl.
46
Why is second-best pricing usually applied as a cordon around a city centre?
It is more practical this way.
47
What is the difference between the second-best pricing compared to in lecture 2?
Here the roads are in a series, whereas in lecture 2 they were parallel.
48
What is the expression for the optimal cordon toll?
๐œ๐‘†๐ต = ๐‘กโ€ฒ๐‘š (๐‘›๐‘š + ๐‘›๐‘ ) + ๐‘กโ€ฒ๐‘ ๐‘›๐‘  . ๐‘ž๐‘š/๐‘ž๐‘š โˆ’ ๐‘กโ€ฒ๐‘ ๐‘๐‘š
49
What does ๐‘ž๐‘š/๐‘ž๐‘š โˆ’ ๐‘กโ€ฒ๐‘ ๐‘๐‘š > 0 mean?
This toll is higher than the MEC of congestion on the midtown road
50
Why is the cordon toll adjusted?
To make suburban commuters internalise the cost of their congestion, however, this isn't fully adjusted as ๐‘ž๐‘š/๐‘ž๐‘š โˆ’ ๐‘กโ€ฒ๐‘ ๐‘๐‘š < 1 to reflect the fact that midtown commuters do not cause suburban congestion.
51
Are the 2 road links complements?
Yes, for suburban commuters they are, as they cannot use the midtown road without the suburban road.
52
Why is the 2 roads being complements relevant?
Unlike if they were substitutes, raising the toll on 1 road helps reduce the DWL on the other road.
53
What are the effects of the second best cordon toll on city size, density and housing market?
- Make centre more dense and expensive - Make midtown less dense and expensive - Ambiguous effect on S and city size - Though typically the effect is to reduce city size overall, compared to no toll at all