Congestion Tolling and Urban Spatial Structure

According to the standard model of urban traffic congestion and urban spatial structure, congestion tolling results in a more concentrated city. In recent years, a new model of rush hour urban auto congestion has been developed which incorporates trip-timing decisions: the bottleneck model. In the simplest bottleneck model, optimal congestion tolling without toll revenue redistribution has no effect on trip price since the efficiency gains exactly equal the toll revenue collected. Optimal congestion tolling then has no effect on urban spatial structure. This paper formalizes this result and extends it somewhat.