Pricing of Transport Networks, Redistribution and Optimal Taxation

Résumé

We study optimal pricing of roads and public transport in presence of nonlinear in- come taxation. Individuals are heterogeneous in unobservable earning ability. Optimal transport tarifs depend on time costs of travel and work schedule adjustments (days and hours worked per day) as a response to commuting costs. We find that discounts for low income individuals are optimal only if the time cost of a trip is small enough. Lower travel time costs facilitate screening: therefore, redistribution provides an additional motive for congestion pricing. Finally, we investigate the desirability of means-testing of transport tarifs.

Mots-clés

road pricing; public transport pricing; income taxation; meanstesting;

Codes JEL

H21: Efficiency • Optimal Taxation
H23: Externalities • Redistributive Effects • Environmental Taxes and Subsidies
R41: Transportation: Demand, Supply, and Congestion • Safety and Accidents • Transportation Noise