Compact or Spread-Out Cities: Urban Planning, Taxation, and the Vulnerability to Transportation Shocks

29 Pages Posted: 4 Mar 2007

See all articles by Franck Gusdorf

Franck Gusdorf

CIRED, International Research Centre on Environment & Development, France

S. Hallegatte

World Bank

Date Written: February 2007

Abstract

This paper shows that cities made more compact by transportation taxation are more robust than spread-out cities to shocks in transportation costs. Such a shock, indeed, entails negative transition effects that are caused by housing infrastructure inertia and are magnified in low-density cities. Distortions due to a transportation tax, however, have in absence of shock detrimental consequences that need to be accounted for. The range of beneficial tax levels can, therefore, be identified as a function of the possible magnitude of future shocks in transportation costs. These taxation levels, which can reach significant values, reduce city vulnerability and prevent lock-ins in under-optimal situations.

Keywords: Urban transportation, Housing, Inertia, Vulnerability, Transportation Taxation

JEL Classification: R21, R48, H23, H31

Suggested Citation

Gusdorf, Franck and Hallegatte, Stephane, Compact or Spread-Out Cities: Urban Planning, Taxation, and the Vulnerability to Transportation Shocks (February 2007). FEEM Working Paper No. 17.2007, Available at SSRN: https://ssrn.com/abstract=965650 or http://dx.doi.org/10.2139/ssrn.965650

Franck Gusdorf (Contact Author)

CIRED, International Research Centre on Environment & Development, France ( email )

Campus du Jardin Tropical
45 bis avenue de la Belle Gabrielle
F94736 Nogent sur Marne Cedex
France

Stephane Hallegatte

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

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