Pub Date : 2026-01-23DOI: 10.1016/j.regsciurbeco.2026.104203
Sofia F. Franco , Andrew R. Waxman
In this paper, we explore the implication for urban form, urban structure and optimal land use policy of vacant land used for downtown surface parking lots in urban areas. We develop a dynamic, spatial general equilibrium urban model to show cases where vacant land can be optimal and suboptimal depending upon its temporary use, economic and regulatory conditions as well as externalities. We show in numerical simulations how the structure of the urban economy responds to different policies and consider their implications for different types of cities. These results have important implications for cities concerned about the impacts of vacant land and in particular of surface parking lots in downtown areas.
{"title":"Surface parking lots in downtown areas and the role of regulatory delay in optimal dynamic land use","authors":"Sofia F. Franco , Andrew R. Waxman","doi":"10.1016/j.regsciurbeco.2026.104203","DOIUrl":"10.1016/j.regsciurbeco.2026.104203","url":null,"abstract":"<div><div>In this paper, we explore the implication for urban form, urban structure and optimal land use policy of vacant land used for downtown surface parking lots in urban areas. We develop a dynamic, spatial general equilibrium urban model to show cases where vacant land can be optimal and suboptimal depending upon its temporary use, economic and regulatory conditions as well as externalities. We show in numerical simulations how the structure of the urban economy responds to different policies and consider their implications for different types of cities. These results have important implications for cities concerned about the impacts of vacant land and in particular of surface parking lots in downtown areas.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"118 ","pages":"Article 104203"},"PeriodicalIF":2.9,"publicationDate":"2026-01-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146079612","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-22DOI: 10.1016/j.regsciurbeco.2026.104204
Xiaoling Chu , Kin Lo , Desmond Tsang
This study examines the intertwined relationship of firm location, corporate site visits, transportation, and their impact on stock price crash risk. We first document that firms located further away from financial centers are associated with higher stock price crash risk, but they also have fewer corporate site visits by institutional investors. However, stock price crash risk of these distant firms is particularly mitigated by more corporate site visits. We next utilize the rapid expansion of high-speed rail connections in China as a series of exogenous shocks in a staggered difference-in-differences research design. We find that the openings of high-speed rail stations are followed by increased site visits and reduced stock price crash risk for firms in the newly connected cities. Overall, our findings highlight that transportation infrastructure mitigates stock price crash risk by facilitating institutional site visits to geographically distant firms.
{"title":"Needed but not there: Firm location, corporate site visits, transportation, and stock price crash risk","authors":"Xiaoling Chu , Kin Lo , Desmond Tsang","doi":"10.1016/j.regsciurbeco.2026.104204","DOIUrl":"10.1016/j.regsciurbeco.2026.104204","url":null,"abstract":"<div><div>This study examines the intertwined relationship of firm location, corporate site visits, transportation, and their impact on stock price crash risk. We first document that firms located further away from financial centers are associated with higher stock price crash risk, but they also have fewer corporate site visits by institutional investors. However, stock price crash risk of these distant firms is particularly mitigated by more corporate site visits. We next utilize the rapid expansion of high-speed rail connections in China as a series of exogenous shocks in a staggered difference-in-differences research design. We find that the openings of high-speed rail stations are followed by increased site visits and reduced stock price crash risk for firms in the newly connected cities. Overall, our findings highlight that transportation infrastructure mitigates stock price crash risk by facilitating institutional site visits to geographically distant firms.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"118 ","pages":"Article 104204"},"PeriodicalIF":2.9,"publicationDate":"2026-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146079613","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-14DOI: 10.1016/j.regsciurbeco.2026.104202
David M. Brasington , Daniel P. McMillen , Evan Carson
We provide the first causal evidence of the effect of taxation and spending on the redevelopment of commercial property. We analyze a unique dataset of local government property tax levies to renew current expense funding for general operating purposes. Our regression discontinuity approach finds cities that vote to renew taxes and spending have more redevelopment of commercial property than cities that cut balanced-budget funding by an average of 21 %. Demolition doubles, and new construction increases an average of 48 %. The results hold for cities in urban areas, service sector-oriented cities, and cities with above-median population growth. We even find that renewing funding for local government services spurs more commercial redevelopment in cities with declining populations, but only in a sample that allows outliers. Firms seem to value local government spending more than cutting taxes.
{"title":"Effect of local government taxes and spending on the redevelopment of commercial property","authors":"David M. Brasington , Daniel P. McMillen , Evan Carson","doi":"10.1016/j.regsciurbeco.2026.104202","DOIUrl":"10.1016/j.regsciurbeco.2026.104202","url":null,"abstract":"<div><div>We provide the first causal evidence of the effect of taxation and spending on the redevelopment of commercial property. We analyze a unique dataset of local government property tax levies to renew current expense funding for general operating purposes. Our regression discontinuity approach finds cities that vote to renew taxes and spending have more redevelopment of commercial property than cities that cut balanced-budget funding by an average of 21 %. Demolition doubles, and new construction increases an average of 48 %. The results hold for cities in urban areas, service sector-oriented cities, and cities with above-median population growth. We even find that renewing funding for local government services spurs more commercial redevelopment in cities with declining populations, but only in a sample that allows outliers. Firms seem to value local government spending more than cutting taxes.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"118 ","pages":"Article 104202"},"PeriodicalIF":2.9,"publicationDate":"2026-01-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146039843","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-13DOI: 10.1016/j.regsciurbeco.2025.104189
Gabriele Cardullo , Agnese Sechi
We develop a spatial equilibrium model with labor market frictions and non-homothetic preferences to investigate how local changes influence regional inequality. We show that these effects are significantly amplified when the housing expenditure share is large and falls with income (meaning that housing is a necessity good) and wage bargaining is decentralized. Under non-homothetic preferences, local changes induce stronger variations in real income and, in turn, on inter-regional labor mobility. Calibrated to German data, the model provides a quantitative explanation for the narrowing East–West divide in Germany over the past fifteen years.
{"title":"Hot property. The amplifying effects of housing costs on regional inequality","authors":"Gabriele Cardullo , Agnese Sechi","doi":"10.1016/j.regsciurbeco.2025.104189","DOIUrl":"10.1016/j.regsciurbeco.2025.104189","url":null,"abstract":"<div><div>We develop a spatial equilibrium model with labor market frictions and non-homothetic preferences to investigate how local changes influence regional inequality. We show that these effects are significantly amplified when the housing expenditure share is large and falls with income (meaning that housing is a necessity good) and wage bargaining is decentralized. Under non-homothetic preferences, local changes induce stronger variations in real income and, in turn, on inter-regional labor mobility. Calibrated to German data, the model provides a quantitative explanation for the narrowing East–West divide in Germany over the past fifteen years.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"118 ","pages":"Article 104189"},"PeriodicalIF":2.9,"publicationDate":"2026-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145969389","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-09DOI: 10.1016/j.regsciurbeco.2026.104191
Henrik Andersson , Ina Blind , Fabian Brunåker , Matz Dahlberg , Greta Fredriksson , Jakob Granath , Che-Yuan Liang
Place-based policies that allocate resources to specific areas inadvertently also designate these areas as needing assistance, potentially leading to the development of neighborhood stigma. The common coupling of resource allocation and area designation makes it difficult to measure the stigma effect. However, the Swedish police’s listing of “vulnerable” neighborhoods, initially introduced in 2015, lacked accompanying resources, offering a unique opportunity to examine the isolated impact of place-based policies on stigma. We study the stigma associated with unfavorable area labels through an analysis of how police listings affect housing prices — a reliable measure of location value. Employing the synthetic control method, we find that the list resulted in an average price decrease of 3.6% within one year and 6.5% within six years in the designated neighborhoods. In line with ideas of racial stigma, we also find that areas with a higher proportion of minority residents prior to classification experienced more pronounced negative effects.
{"title":"What is in a label? On neighborhood labeling, stigma and housing prices","authors":"Henrik Andersson , Ina Blind , Fabian Brunåker , Matz Dahlberg , Greta Fredriksson , Jakob Granath , Che-Yuan Liang","doi":"10.1016/j.regsciurbeco.2026.104191","DOIUrl":"10.1016/j.regsciurbeco.2026.104191","url":null,"abstract":"<div><div>Place-based policies that allocate resources to specific areas inadvertently also designate these areas as needing assistance, potentially leading to the development of neighborhood stigma. The common coupling of resource allocation and area designation makes it difficult to measure the stigma effect. However, the Swedish police’s listing of “vulnerable” neighborhoods, initially introduced in 2015, lacked accompanying resources, offering a unique opportunity to examine the isolated impact of place-based policies on stigma. We study the stigma associated with unfavorable area labels through an analysis of how police listings affect housing prices — a reliable measure of location value. Employing the synthetic control method, we find that the list resulted in an average price decrease of 3.6% within one year and 6.5% within six years in the designated neighborhoods. In line with ideas of racial stigma, we also find that areas with a higher proportion of minority residents prior to classification experienced more pronounced negative effects.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"118 ","pages":"Article 104191"},"PeriodicalIF":2.9,"publicationDate":"2026-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145981833","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the determinants of optimal city size in a monocentric city model under monopolistic competition with heterogeneous firms. By decomposing the channels through which city size expansion affects consumption behavior and welfare, we find that firm heterogeneity matters solely through Price effect, a channel specific to variable elasticity of substitution (VES) preferences. In response to city size expansion, more productive firms reduce their prices more sharply, causing consumption to shift toward the varieties they produce and enhancing welfare by correcting resource misallocation. This indicates that the Price effect under firm heterogeneity addresses a different type of resource misallocation, compared with that observed under symmetric-firm settings. We show that firm heterogeneity influences the characteristics of optimal city size by altering the nature of resource misallocation. Unlike the misallocation under symmetric firms — which causes the second-best city size (i.e., the optimal city size under market equilibrium) to deviate from the first-best level and leads to the breakdown of the Henry George Theorem (HGT) at the second-best outcome — the misallocation under heterogeneous firms does not have such effects: the second-best city size can coincide with the first-best level, and the HGT can hold at the second-best outcome.
{"title":"A welfare analysis of a monocentric city model under monopolistic competition with heterogeneous firms and variable elasticity of substitution preference","authors":"Tadashi Morita , Atsushi Tadokoro , Kazuhiro Yamamoto","doi":"10.1016/j.regsciurbeco.2025.104190","DOIUrl":"10.1016/j.regsciurbeco.2025.104190","url":null,"abstract":"<div><div>We study the determinants of optimal city size in a monocentric city model under monopolistic competition with heterogeneous firms. By decomposing the channels through which city size expansion affects consumption behavior and welfare, we find that firm heterogeneity matters solely through <em>Price effect</em>, a channel specific to variable elasticity of substitution (VES) preferences. In response to city size expansion, more productive firms reduce their prices more sharply, causing consumption to shift toward the varieties they produce and enhancing welfare by correcting resource misallocation. This indicates that the <em>Price effect</em> under firm heterogeneity addresses a different type of resource misallocation, compared with that observed under symmetric-firm settings. We show that firm heterogeneity influences the characteristics of optimal city size by altering the nature of resource misallocation. Unlike the misallocation under symmetric firms — which causes the second-best city size (i.e., the optimal city size under market equilibrium) to deviate from the first-best level and leads to the breakdown of the Henry George Theorem (HGT) at the second-best outcome — the misallocation under heterogeneous firms does not have such effects: the second-best city size can coincide with the first-best level, and the HGT can hold at the second-best outcome.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"117 ","pages":"Article 104190"},"PeriodicalIF":2.9,"publicationDate":"2025-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145926256","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-18DOI: 10.1016/j.regsciurbeco.2025.104188
Hsi-Ling Liao
As cities face housing affordability challenges, some local governments adopt land-use reforms to increase the residential development capacity in the city. This type of “upzoning” policy aims to increase housing supply and lower local housing costs, but it can also create positive amenity effects that attract high-income households to the neighborhood. This paper studies how the large-scale neighborhood upzoning in New York City between 2004 and 2013 affected local housing supply, prices, and residential mobility patterns using a difference-in-differences method. I compare upzoned areas and the adjacent areas outside the upzoned boundaries over time after compiling a parcel-level dataset that merges zoning amendment maps with microdata tracking individual address histories. I find that relaxing zoning regulations leads to increases in housing supply. There is also a modest increase in the probability of incumbent residents moving to a different neighborhood or leaving the metropolitan area, but they are not more likely to be displaced to lower-income areas. Finally, there is evidence that after the upzoning, in-migrants come from slightly higher-income neighborhoods. These results suggest that in this context, upzoning can both increase housing supply and change the composition of local residents in the neighborhood in the long term.
{"title":"The effect of rezoning on local housing supply and demand: Evidence from New York City","authors":"Hsi-Ling Liao","doi":"10.1016/j.regsciurbeco.2025.104188","DOIUrl":"10.1016/j.regsciurbeco.2025.104188","url":null,"abstract":"<div><div>As cities face housing affordability challenges, some local governments adopt land-use reforms to increase the residential development capacity in the city. This type of “upzoning” policy aims to increase housing supply and lower local housing costs, but it can also create positive amenity effects that attract high-income households to the neighborhood. This paper studies how the large-scale neighborhood upzoning in New York City between 2004 and 2013 affected local housing supply, prices, and residential mobility patterns using a difference-in-differences method. I compare upzoned areas and the adjacent areas outside the upzoned boundaries over time after compiling a parcel-level dataset that merges zoning amendment maps with microdata tracking individual address histories. I find that relaxing zoning regulations leads to increases in housing supply. There is also a modest increase in the probability of incumbent residents moving to a different neighborhood or leaving the metropolitan area, but they are not more likely to be displaced to lower-income areas. Finally, there is evidence that after the upzoning, in-migrants come from slightly higher-income neighborhoods. These results suggest that in this context, upzoning can both increase housing supply and change the composition of local residents in the neighborhood in the long term.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"117 ","pages":"Article 104188"},"PeriodicalIF":2.9,"publicationDate":"2025-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145840953","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-16DOI: 10.1016/j.regsciurbeco.2025.104186
Shih-Fen Cheng , Wen-Tai Hsu , Jing Li
This paper studies how dynamic pricing influences taxi drivers’ behaviors using a unique event, the inception of the JustGrab program in Singapore in 2017, which introduced dynamic pricing to some, but not all, taxi drivers. This is the first time in history that traditional taxi drivers have access to dynamic pricing. Using data covering the universe of taxi trips one month before and after the inception of JustGrab, we find that there is immediate spatial reallocation that directs more taxi drivers to the previously less-served areas, that there is also a temporal reallocation that directs more taxi drivers to rush hours, as well as lunch hours, and that there is an overall increase in labor supply. Our results suggest that taxi drivers benefit from access to dynamic pricing, at least during our study period. As the proliferation of app-based ride-hailing technology has encountered various degrees of opposition from the taxi industry in cities across the globe, such a lesson from JustGrab is worth attention.
{"title":"When taxi drivers meet dynamic pricing: A lesson from Singapore’s JustGrab program","authors":"Shih-Fen Cheng , Wen-Tai Hsu , Jing Li","doi":"10.1016/j.regsciurbeco.2025.104186","DOIUrl":"10.1016/j.regsciurbeco.2025.104186","url":null,"abstract":"<div><div>This paper studies how dynamic pricing influences taxi drivers’ behaviors using a unique event, the inception of the JustGrab program in Singapore in 2017, which introduced dynamic pricing to some, but not all, taxi drivers. This is the first time in history that traditional taxi drivers have access to dynamic pricing. Using data covering the universe of taxi trips one month before and after the inception of JustGrab, we find that there is immediate spatial reallocation that directs more taxi drivers to the previously less-served areas, that there is also a temporal reallocation that directs more taxi drivers to rush hours, as well as lunch hours, and that there is an overall increase in labor supply. Our results suggest that taxi drivers benefit from access to dynamic pricing, at least during our study period. As the proliferation of app-based ride-hailing technology has encountered various degrees of opposition from the taxi industry in cities across the globe, such a lesson from JustGrab is worth attention.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"117 ","pages":"Article 104186"},"PeriodicalIF":2.9,"publicationDate":"2025-12-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145791027","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-12DOI: 10.1016/j.regsciurbeco.2025.104187
Lili Xu , Saisai Guo , Honglin Zhong , Shuai Shao
Urban children in low- and middle-income countries (LMICs) are consistently healthier than their rural counterparts, yet causal evidence explaining this disparity remains limited. This study exploits China’s city–county merger (CCM) policy as a quasi-natural experiment to identify the causal impact of urbanization on child growth. We find consistent and robust evidence that CCM significantly reduces the prevalence of childhood stunting and wasting. Longer exposure to the policy is associated with greater declines in stunting, while the effect on wasting attenuates with child age. The impact of CCM on child growth operates primarily through improvements in nutrition supply and public services that unfold over time, as well as through pollution mitigation effects that are immediate but not sustained. These findings offer policy-relevant insights for LMICs seeking to address child growth challenges through urban reform.
{"title":"The impact of urbanization on child growth: Evidence from city-county mergers in China","authors":"Lili Xu , Saisai Guo , Honglin Zhong , Shuai Shao","doi":"10.1016/j.regsciurbeco.2025.104187","DOIUrl":"10.1016/j.regsciurbeco.2025.104187","url":null,"abstract":"<div><div>Urban children in low- and middle-income countries (LMICs) are consistently healthier than their rural counterparts, yet causal evidence explaining this disparity remains limited. This study exploits China’s city–county merger (CCM) policy as a quasi-natural experiment to identify the causal impact of urbanization on child growth. We find consistent and robust evidence that CCM significantly reduces the prevalence of childhood stunting and wasting. Longer exposure to the policy is associated with greater declines in stunting, while the effect on wasting attenuates with child age. The impact of CCM on child growth operates primarily through improvements in nutrition supply and public services that unfold over time, as well as through pollution mitigation effects that are immediate but not sustained. These findings offer policy-relevant insights for LMICs seeking to address child growth challenges through urban reform.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"117 ","pages":"Article 104187"},"PeriodicalIF":2.9,"publicationDate":"2025-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145791028","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-12DOI: 10.1016/j.regsciurbeco.2025.104183
Manuel Frondel, Patrick Thiel, Colin Vance
Exploiting exogenous variation in retail fuel prices from a temporary fuel tax discount in Germany, we explore the distributional consequences emerging from differential pass-through rates over space and time. We draw on daily gasoline prices of virtually all gas stations in Germany and neighboring France, with France serving as a control site, and estimate an event study model covering the full period of the discount from June to August 2022. We find average pass-through rates on the order of 96 % for diesel and 82 % for petrol, but with substantial variability by regional income and station density. Our results additionally reveal heterogeneity over time: The magnitude of the pass-through rate dissipates sharply for both fuel types over the three months in which the discount was in effect, dropping to 46 % for diesel and 74 % for petrol by the final month, a pattern consistent with retailer responses to short-term changes in consumer attention. Taken together, our results indicate that average pass-through estimates may obscure spatial and temporal heterogeneity that bears upon the assessment of distributional effects: A back-of-the-envelope calculation indicates that 62 % of the discount's financial relief accrues to households with above-median incomes.
{"title":"The distributional consequences of tax pass-through: The case of Germany's fuel tax discount","authors":"Manuel Frondel, Patrick Thiel, Colin Vance","doi":"10.1016/j.regsciurbeco.2025.104183","DOIUrl":"10.1016/j.regsciurbeco.2025.104183","url":null,"abstract":"<div><div>Exploiting exogenous variation in retail fuel prices from a temporary fuel tax discount in Germany, we explore the distributional consequences emerging from differential pass-through rates over space and time. We draw on daily gasoline prices of virtually all gas stations in Germany and neighboring France, with France serving as a control site, and estimate an event study model covering the full period of the discount from June to August 2022. We find average pass-through rates on the order of 96 % for diesel and 82 % for petrol, but with substantial variability by regional income and station density. Our results additionally reveal heterogeneity over time: The magnitude of the pass-through rate dissipates sharply for both fuel types over the three months in which the discount was in effect, dropping to 46 % for diesel and 74 % for petrol by the final month, a pattern consistent with retailer responses to short-term changes in consumer attention. Taken together, our results indicate that average pass-through estimates may obscure spatial and temporal heterogeneity that bears upon the assessment of distributional effects: A back-of-the-envelope calculation indicates that 62 % of the discount's financial relief accrues to households with above-median incomes.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"117 ","pages":"Article 104183"},"PeriodicalIF":2.9,"publicationDate":"2025-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145840952","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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