Working paper

The Welfare Consequences of Urban Traffic Regulations

Isis Durrmeyer, and Nicolas Martinez


We develop a structural model to represent individual transportation decisions, the equilibrium road traffic levels, and speeds inside a city. The model is micro-founded and incorporates a high level of heterogeneity: individuals differ in access to transportation modes, values of travel time, and schedule constraints; road congestion technologies vary within the city. We apply our model to the Paris metropolitan area and estimate the model parameters from publicly available data. We predict the road traffic equilibria under driving restrictions and road tolls and measure the policy consequences on the different welfare components: individual surplus, tax revenues, and cost of emissions.


structural model; policy evaluation, transportation; congestion, distributional effects; air pollution;

JEL codes

  • L9: Industry Studies: Transportation and Utilities
  • R41: Transportation: Demand, Supply, and Congestion • Safety and Accidents • Transportation Noise
  • Q52: Pollution Control Adoption Costs • Distributional Effects • Employment Effects


Isis Durrmeyer, and Nicolas Martinez, The Welfare Consequences of Urban Traffic Regulations, TSE Working Paper, n. 22-1378, October 2022.

See also

Published in

TSE Working Paper, n. 22-1378, October 2022