Suppose everyone has a car with a good heater but only rich peoples cars have air conditioners

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Suppose everyone has a car with a good heater but only rich people’s cars have air conditioners that work. Summers are very hot and winters are very cold (there is no fall and no spring). Schedule delay costs are higher for rich people than for poor and do not vary with the season. There are regular traffic jams at a bottleneck where there is no toll. The group of drivers who pass through the bottleneck at the most convenient times is different in the summer than it is in the winter. If congestion pricing is implemented, none of the revenue will be used to benefit poor people. You want to make sure that congestion pricing doesn’t harm poor people. Can you implement congestion pricing in either season or in both with this assurance? Explain.

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City Economics

ISBN: 9780674019188

1st Edition

Authors: Brendan O'Flaherty, Brendan O&Flaherty

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