In this paper, a CUE model to find optimal policy package and optimal population distribution is developed by expanding a CUE model by Mutou and Ueda (2000) into social surplus maximization model. The social surplus function is defined by household's EV (equivalent variation), vehicle's CO
2 emission cost, and capital gain due to land rent change. Then a calculation method for solving the maximization problem is developed by modifying Fowkes's method (1998), which can be applied to the other mathematical problems with equilibrium constraints (MPEC). Finally, the model is applied in Nagoya metropolitan area, and optimal policy of income subsidy and optimal population distribution are found.
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