WORKING PAPER - Are road pricing schemes efficient in polycentric cities

The size of the Central Business District (CBD) and the Secondary Business Districts (SBDs) are determined at both the equilibrium (“Laissez-faire”) and the optimum (a benevolent planner maximizes the welfare of the inhabitants). [...] However, when a polycentric structure emerges, this result does not hold, as the efficiency of the cordon toll or the flat tax depends mainly on the wage gap between the business centers before the implementation of the road pricing scheme. [...] In this spatial organization, ẑ is the right limit of the area formed by workers commuting to the CBD (i.e., the left limit of the built-up area constituted by individuals working in the SBD). [...] Because the size of a SBD depends on the wage gap between the business districts, it is crucial to analyze the effects of jobs decentralization on welfare according to the level of (µ). [...] To understand how the wage gap and commuting time costs affect aggregate welfare, the analysis considers the case where the wage rates observed in the CBD and the SBDs are equal.