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Alex Anas:Abstract and background reading

SHORT ABSTACT: The Regional Economy, Land Use and Transportation (RELU-TRAN) model is a general equilibrium model of the urban economy, its land use and its transportation, solidly founded in microeconomic theory. Recently, RELU-TRAN was applied to congestion pricing in Greater Los Angeles and the recycling of congestion pricing revenue to reduce distortionary taxes; and to an analysis of the effects of the Projet du Grand Paris public transport megaproject proposed for the Greater Paris Metropolitan Area, and the effects of this project on job productivity, congestion relief and population growth. The talk will go over the major results of the Los Angeles and Greater Paris applications.


The cost of congestion and the benefits of congestion pricing: A general equilibrium analysis. (by Alex Anas, published in Transportation Research B, 136, 2020, pages 110-137) 

Abstract: The benefits of congestion pricing are examined with a spatially detailed computable general equilibrium model of the Greater LA region. The model treats choices of roads on a network, of driving or public transit, of residence and job location, of non-work trip patterns, of housing type and size; vacancies and new construction, production, interindustry trade and exports. The aggregate benefit of pricing LA County road congestion increases 2.7 fold when the toll revenue is recycled to cut the income tax of the poorer LA County workers while maintaining region-wide tax revenue neutrality. Consumers get 66% of the aggregate benefit and landlords 41%, while importers suffer losses equal to 7% of the aggregate benefit. Gross regional product increases by 1.34%. The aggregate benefit changes negligibly when the toll revenue is recycled to cut sales or property taxes instead of the income tax, but gross product still rises by 0.6%. Under the sales tax cut, consumers, importers and landlords benefit more evenly than under the income tax cut, but with the property tax cut nearly all of the cut is capitalized into property values.

Productivity benefits of urban transportation: a general equilibrium analysis of «Projet du Grand Paris» (by Alex Anas and Huibin Chang, working paper, October 2020): 

Abstract: «Projet du Grand Paris», a rail transit megaproject planned for 2035, is designed to decongest the City of Paris by circumferentially linking its inner suburbs. A general equilibrium model of travel, labor, real estate and output markets is used to assess the project. The region’s spatial distribution of jobs and residences are endogenous in the model. The megaproject reduces public transit travel times, alleviates road congestion and imparts a positive Marshallian externality on production. This reduces the prices of the region’s goods benefitting the region’s consumers and those who import from the region. In the short run, nominal prices, wages and rents fall but wages and rents, adjusted by the price level, and outputs rise. In the long run, regional population grows and output rises more. Revenue from Pigouvian tolls on road congestion exceed the project’s direct cost, but dent nominal incomes and purchasing power, causing income and sales tax revenues to fall. Social welfare gains of the PGP are 1.31%  of the region’s average income in the short run, falling to 1.06% with congestion tolls; 0.36% in the long run, rising to 1.34% with congestion tolls. Tolling recoups 81% of project costs plus losses from tax revenues in the short run; 63% in the long run.


The talk will be about applications of RELU-TRAN in Los Angeles and in Paris. All the relevant papers can be accessed at





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