Abstract
This study analyzes the floor area ratio (FAR) regulations and road investments as external diseconomies-control policies by using a spatial general equilibrium model with two zones. Using the model, we analyzed three scenarios. In the first scenario, we held road stock facilities fixed and analyzed the optimal FAR regulations. In the second scenario, we held FAR regulations fixed, the optimal road investments are analyzed. In the third scenario, both control policies were changed simultaneously to get the optimal public benefit As a consequence, our study makes it clear by considering the transportation general equilibrium demand function under the imposition of optimal FAR regulations, public benefits can only be measured in a road transport market even in the second-benefit economy.
