Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296169 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11080
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The paper discusses the tax treatment of commuting where wages and housing cost vary across locations. An income tax distorts the locational choices of agents, who dislike commuting and have preferences for place of residence Wages, housing cost and commuting cost determine how subsidising or taxing commuting affects behaviour and social efficiency. A subsidy encourages commuting and induces agents to choose a more favourable living place. The analysis clarifies the circumstances in which the subsidy alleviates or exacerbates the tax distortions, also where housing is tax favoured, as is often the case. The distributional impact depends on the effects of wages on commuting. An empirical illustration based on Norwegian data shows how one can infer efficiency effects of responses to subsidies on commuting.
Subjects: 
income tax
commuting
commuter cost
subsidies on commuting
place of residence
JEL: 
H21
H24
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.