1. EKONOMI PERKOTAAN
URBAN ECONOMIC TRANSPORTATION
KELOMPOK 5:
1. UMA ADI KUSUMA
2. NANIA TAMANA
3. AMALIA RAKHMAWATI
4. DWI LARASATI
5. SELENA DENNYSAL

2. One of the advantages of an urban location is its
proximity to many activities within a metropolitan
area. This part of the book examines the two main
components of the urban transportation system.
Chapter 19 describe the automobile/
highway system, focusing on three
problems caused by automobiles:
congestion, pollution, and highway
accidents.
Chapter 20 deals wiith urban mass transit,
focusing on the choice of a commuting
mode by a commuter (e.g., automobiles,
bus, or light rail) and the choice of a
transportation system by a city planner.

3. INSIDE THE CHAPTER
Autos and Highways
Congestion: Equilibrium vs Optimum Traffic Volume
Alternative to a Congestion Tax: Taxes on Auto Use
Highway Pricing and Traffic Volume in the Long Run
Congestion and Land-Use Patterns
Autos and Air Pollution

4. Examine three transportation problems caused by
automobiles.
AUTOS AND HIGHWAYS
Congestion Air Pollution
Highway
Accidents

5. Congestion during rush hours is inevitable, and a
certain level of congestion is actually efficient. Just
as it would be inefficient to eliminate all air
pollution, it would be inefficient to eliminate all
congestion.
The question is whether congestion is at optimum
level. If not, there are a number of of policies that
could decrease congestion.

6. First, including
various taxes on
auto travel,
subsidies for mass
transit, and
highway
construction.
The second
problem, air
pollution, is
controlled by the
federal goverment
through its auto
emissions policies.
The thrid
transportation
problem is auto
safety. Traffic
accidents injure
and kill people,
and also discrupt
traffic flow,
contributing to the
congestion
problem.

7. 0
10
20
30
40
50
60
Central-city residents Suburban residents
Modal Choice of Central-city and Suburban
Commuters
Walk
Bus or rail
Carpool
Drive alone

8. CONGESTION: EQUILIBRIUM VS
OPTIMUM TRAFFIC VOLUME
Most cities suffer from traffic congestion during the
morning and evening rush hours.
The annual cost of congestion (for extra time and
fuel consumption) in the 50 largest metropolitan
areas is about $35 billion (Small, 1997).
We’ll use a simple model to explain the congestion
phenomenon & evaluate some alternative public
policies to deal with it.

9. Consider a city with the following characteristic:
Radialhighway
There is two-
lane higway
from
suburbs to
the city
center (a
distance of
10 miles). Monetarytravel
cost
Monetary
travel cost
of auto
travel is 20
cents per
mile.
Timecost
The
opportunity
cost of
travel time is
10 cents per
minute.

10. The Demand for Urban Travel
The demand curve is a
marginal-benefit curve.
For each trafffic volume,
it shows how much the
marginal traveler is
willing to pay for the
highway trip.
Congestion Externalities and the Congestion Tax

11. The Private and Social Costs of Travel
A
Traffic
voluame
(vehicles)
B
Trip time
(minutes)
C
Increase
in Travel
Time per
Driver
(minutes)
D
Increase
in Total
Travel
Time
(minutes)
E
External
Trip Cost
($)
F
Private
Trip
Cost
($)
G
Social
Trip Cost
($)
H
Marginal
Benefit
(demand)
200 12.0 0 0 0 3.2 3.20 31.10
400 12.0 0 0 0 3.20 3.20 27.44
600 12.8 0.007 4.2 0.42 3.28 3.70 23.78
800 14.8 0.013 10.4 10.4 3.48 4.52 20.12
1000 18.0 0.019 19.0 1.90 3.80 5.70 16.46
1200 22.4 0.025 30.0 3.00 4.24 7.24 12.80
1400 28.0 0.031 43.4 4.34 4.80 9.14 9.14
1600 34.8 0.037 59.2 5.92 5.48 11.40 5.48
1800 42.8 0.043 77.4 7.74 6.28 14.02 182
2000 52.0 0.049 98.0 9.80 7.20 17.00
The relationships
between traffic
volume and travel
time.
Trip time = 12.0 +
0.001(volume - 400) +
0.000015(volume -
400)2
Column B lists the
trip time(the travel
time per driver).
Columns C&D show the
effects of the marginal
driver on the travel times
of other drivers.
Column E are based
on the assumption of
travel time is 10
cents per minute.
Columns F&G show the
private and social costs
of travel.

12. The congestion externality: The marginal driver
slows traffic and increases travel time, forcing
other dreivers to spend more time on the road.
The external trip cost equal as the monetary value
of the congestion externality.
 The private trip cost is the travel cost incurred by
the individual commuter, defined as the sum of
the monetary cost($2.00) and the private time
cost.
 The social trip cost is the sum of the private trip
cost(column F) and the external trip cost(column
E).

13. Equilibrium number of drivers is a driver uses the
highway if the marginal benefit of a trip(from
demand curve) exceeds the private trip cost.
Optimum number of driver  optimum level is the
marginal benefit equals the marginal cost(basic
efficiency rule).
Equilibrium vs Optimum Traffic Volume

14. The government could use a congestion tax to
generate the optimum traffic volume.
A tax equal to the external trip cost would
internalize the congestion externality, generating
the optimum number of drivers.
The Policy Response: Congestion Tax

15. A key consideration in the evaluation of the
congestion tax is the disposition of the revenue it
generates.
The government doesn’t throw the tax revenue
away, but presumably use it to finance public
services or to decrease other local taxes.
To simplify the matters, suppose that the
government redestributes the tax revenue, in
equal shares, to all of the households who use the
highway before the congestion tax is imposed.
Benefits and Costs of Congestion Taxes

16. A more rigorous analysis of the benefits and costs
would show that some people in the city would be
harmed by the congestion tax policy: for some
travelers, the savings in the travel costs and the
transfer payment would not be large enough to
offset the congestion tax or the loss in consumer
surplus.
And would also show that: the winners’ benefits
exceed the losers’ costs.

17. Peak vs Off-Peak Travel
Congestion Tax during Peak and Off-Peak Periods
During the of-peak period, the
demand for travel is relatively low,
generating a low traffic volume
(Vo, compared to Vp during the
period), so the optimum
congestion tax is relatively low

18. The government collect the congestion tax with:
The high technology version of toll booths: a
vehicle-identification system (VIS).
Under the VIS, every car is eqquiped with a
transponder – an electronic device that allows
sensors along the road to idnetify the car as it
passes.
The system records trhe number of times a vehicle
uses the congested highway and sends a
congestion bill to the driver at the end of the
month
Implementing the Congestion Tax

19. A number of alternatif policies have been
proposed. A set of policies may discourage auto
use by the cost of auto travel.
ALTERNATIVE TO A CONGESTION TAX:
TAXES ON AUTO USE
Gasoline
taxes
Parking taxes
Congestion-
zone taxes
How effective are these policies compared to a
congestion tax?

20. The ways how congestion tax decreases the trafic
volume
Modal
substitution
Time of travel
Travel route
Location
choices
Tax increases the cost of auto
travel relative to carpooling and
mass transit, causing some
travelers to switch to those other
modes.
The tax is highest during the
peak travel periods, causing
some travelers to travel at
different times.
The tax is
highest on the
most
congested
routes, causing
some travelers
to switch to
alternative
routes.
The tax
increases the
unit cost of
travel (travel
cost per mile),
causing some
commuters to
decrease their
commuting
distances.

21. One alternative to the congestion tax is gasoline
tax. The simple idea is that if travel is more
expensive, traffic volume decreases.
The problem is that the gas tax increases the cost
of all automobile travel, not just travel along
congested routes during peak periods.
In contrast with the congestion tax, which changes
travel times and routes, gas tax doesn’t encourage
drivers to switch to other travel times or routes.
Gasoline tax

22. A number of cities use parking taxes to discourage
driving to central business district jobs.
Explained by Parody (1984), the surcharge
decreased traffic volume because:
Parking tax
Some
commuters
switched to
carpools and
mass transit.
Some
changed their
travel times.

23. There are three potential problems with using
parking taxes to decrease congestion.
• Taxes must be imposed only on peak-period
commuters.
1
• In contrast with congestion tax, parking tax
doesn’t depend on the distance traveled.2
• Because much of the congestion
problem is caused by cars that do not
park in congested areas, the tax doesn’t
force all peak-period traveler to pay for
the congestion they cause.
3

24. So far, congestion policies discuss about how to
decrease congestion by increasing the cost of
driving.
There are several alternative approaches.
Capacity Expansion
and Traffic Design
Subsidies for Transit

25. One response to the congestion problem is to
widen the highway to increase its carrying
capacity.
Widening the highway decreases the trip cost of
all drivers, so it increases consumer surplus.
The city could also improve the flow of traffic on
the existing highway, such as synchronized the
street lights to keep traffic flowing at a steady
speed.
Capacity Expansion and Traffic Design

26. Effects of Widening the Highway
The widening of the
highway shifts the
private trip cost to the
right. The congestion
threshold increases, and
trip cost is lower at every
traffic volume above the
original threshold
volume. The decrease in
trip cost increase traffic
volume. The benefit of
widening is increasing in
consumer surplus.

27. Another alternative to the taxation of auto travel is
the subsidization of mass transit. Because transit
and autos are substitute travel modes, so a
decrease in the cost of transit causes some
consumers to switch from autos to transit.
In other words, a transit subsidy decreases the auto
volume, narrowing the gap between the
equilibrium and optimum traffic volume.
Subsidies for Transit

28. Effects of Transit Subsidies on Auto Volume and Transit Ridership
In the optimum situation, auto drivers pay a congestion tax, so auto volume is
A* and transit ridership is T*. If there is no congestion tax, the auto volume is A’
and transit ridership is T’. A transit subsidy increases transit ridership to T” and
decreases auto volume to A”.

29. HIGHWAY PRICING AND TRAFFIC
VOLUME IN THE LONG RUN
• Derive the average total-cost curves for different highway
widths.
• Derive the long run cost curves (average and marginal).
• Pick the optimum traffic volume and road width.
• Pick the congestion tax that generates the optimum traffic
volume on the optimum road.

30. Derive The Average Total-cost Curves for Different Highway
Widths
ATC = Trip Cost + Average
Road Cost
Total cost of building
highway devide
number of trip
Two effects on ATC caused by
an incerasing traffic volume:
The roads-cost effect & The trip-
cost effect
The ATC reaches its minimum
point at a volume of V’ and V*
drivers
Under assumption of constant
return to scale in highway
building

31. Long-Run Average Cost and Marginal-Cost Curves
• LRAC shows the minimum average total cost for
each traffic volume
• Two points on LRAC: V’ drivers on C* (2 lanes) &
V* drivers on C* (4 lanes)
• Made up of the minimum point of ATC for
different width, optimum highway for each
traffic volume
• Given the assumption of constant return to
scale, LRAC= horizontal

32. LRMC indicates the marginal social
cost of an additional driver, including
the cost widening
LRMC is the as LRAC

33. Optimum Volume and Road Width
Optimum Traffic Volume:
MB = MC
D AC
 V* as the optimum
traffic volume
 4 lanes as the optimum
road width
How does city persuade
the optimum number of
drivers to use the highway?
Depend on the existention
of congestion tax

34. Congestion Tolls Pay for the optimum Road
The revenue from
the congestion
tax covers the
cost of bulding
the road.
If tax revenue
exceeds the total
cost of building
the road, the
roads should be
widened.

35. Untuk mengetahui efek dari eksternalitas
kepadatan dan pajak kepadatan pada
pola penggunaan lahan .
Dengan menggunakan konsep Land
Rent dan Urban Land Use patterns
untuk menjelaskan bagaimana sistem
pajak kepadatan merubah
penggunaan lahan dan ukuran kota.
CONGESTION AND LAND-USE
PATTERNS

36. Partial Equilibrium Effects
Peningkatan unit cost
of commuting
meningkatkan slope
housing price function
dan residential bid-
rent function
Partial-Equilibrium Effects of Congestion Taxes

37. Congestion Taxes and Residential Density

38. Menjelaskan efek perubahan lahan terhadap
pasar tenaga kerja kota.
Pajak meningkatkan total penawaran tenaga
kerja karena meningkatkan efisiensi sistem
transportasi kota dan meningkatkan kesejahteraan
resident kota.
Karena pajak kepadatan menghasilkan
keuntungan untuk city resident, maka aktivitas
relatif kota juga meningkat, dan kemudian
meningkatkan total penawaran tenaga kerja.
General Equilibrium Effects

39. Pajak kepadatan juga meningkatkan tingkat upah
kota, karena peningkatan total penawaran
tenaga kerja yang menyebabkan excess
penawaran tenaga kerja.
Untuk mengetahui bagaimana perubahan kota
setelah adanya general equilibrium effects, bisa
dengan menggunakan komputer untuk
memperoleh 2 gambaran keadaan ekonomi
sebelum dan sesudah pajak.

40. Variable Initial City Congestion Tax City
Population $18000 $61000
Wage ($ per hour) 6.00 5.31
Commute distance (miles) 3.72 3.42
Commuting Time (hours/week) 3.73 3.41
Percent of Land use for transportation 17.9 16.2
General Equilibrium Effects on Congestion Taxes

41. Analisa congestion tax menjelaskan tentang
pentingnya peraturan untuk masalah urban.
Kota yang memberlakukan pajak kongesti
biasanya akan tumbuh.
Hal tersebut dikarenakan pajak kongesti
meningkatkan efisiensi transportasi kota dan
meningkatkan keatraktifan relatif kota tersebut.

42. Another urban transportation problem is air
pollution resulting from the emissions of motor
vehicles. In the US, Motor vehicles powerd by
petroleum products emit carbon dioxide (CO2),
one of the “greenhouse” gates that are
accumulating in the atmosphere.
Most scientists believe the buildup of these gases
will cause global temperatures to increase,
resulting in significant changes in weather patterns.
AUTOS AND AIR POLLUTION

43. Amendements to the Clean Air Act (in 1977 and
1990) included one innovative feature for the
control of stationary pollution source. In cities
where EPA standards were exceeded, new
pollution source were allowed if two conditions
were stasified.
First, the new sources had to adopt the most
effective abatement technology. Second, existing
source had to dercrease their emissions to ensure
that there was a net improvement in air quality.

44. The economic approach to air pollution starts with
a description of the externality problem. Drivers
base their travel decisions on the marginal private
cost of driving, which is less than the marginal
social. cost because autos and trucks cause air
pollution. The pollution externality by causes
people:
1. To drive cars that generate a relatively large
amount of pollution per mile driven and
2. To drive many too miles. To an economist, the
obvious response is to force people to pay for
pollution, that is to internalize the externality.
The Economic Approach: Effluent Fees

45. One approach would be to install amonitoring
device in every car. Such a device woulde be
measure the car’s emissions, allowing the
goverment to tax the car owner for the air
pollution caused by the car.
For example, if the estimated pollution cost per unit
of carbon monoxide is one cent, the monthly bill
would $2 for a vehicle that emits 200 units
permonth, and $3 for a vehicle that emits 300units.

46. An alternative approach for controling auto
pollution is to subsidize mass transit. Although both
autos and mass transit generate air pollution, the
pollution per passenger is lower on mass transit. If
there are no pollution taxes, auto travel is
underpriced relative to transit.
As explained earlier in the case of congestion
externalities, the underpricing of autos generates
an excessive traffic volume (the equlibrium auto
volume exceeds the optimum volume) and too
little transit ridership (the equilibrium transit ridership
is less the optimum ridership).
Transit Subsidies

47. One response to the underpricing of autos is to
sibsidize transit , the subtstitue good.

48. T H A N K Y O U