Discussion paper

DP18332 The Welfare Consequences of Urban Traffic Regulations

We develop a structural model to represent individual transportation decisions, the equilibrium road traffic levels, and speeds inside a city. The model is micro-founded and incorporates a high level of heterogeneity: individuals differ in access to transportation modes, values of travel time, and schedule constraints; road congestion technologies vary within the city. We apply our model to the Paris metropolitan area and estimate the model parameters from publicly available data. We predict the road traffic equilibria under driving restrictions and road tolls and measure the policy consequences on the different welfare components: individual surplus, tax revenues, and cost of emissions.


Durrmeyer, I and N Martinez (2023), ‘DP18332 The Welfare Consequences of Urban Traffic Regulations‘, CEPR Discussion Paper No. 18332. CEPR Press, Paris & London. https://cepr.org/publications/dp18332