Urban Sprawl, Job Decentralization, and Congestion: the Welfare Effects of Congestion Tolls and Urban Growth Boundaries

This paper develops a spatial general equilibrium model to explore the endogenous relations between urban sprawl, job decentralization, and traffic congestion, and then compare the efficiency and welfare impacts of anti-congestion policies. Results suggest that congestion spurs firms to decentralize and agglomerate away from the urban center, with households living more centrally. A congestion-toll policy brings more compact urban form and serves as the most effective strategy to reduce congestion and correct congestion externalities, by maximally improving social welfare. But such tolls may induce different job losses due to firms labor compensation needs. Urban growth boundary (UGB) strategies tested here alleviate congestion externalities and lower travel times, vehicle-miles traveled, and travel costs, but they also tend to bring some side effects, like worsened congestion, social welfare loss, land rent escalation, fewer job opportunities by residents.