The renewal of Seoul as a sustainable city presents an interesting case study on how economic concepts can be applied to the analyses of public policy.

This presentation attempts to assess Seoul’s urban renewal policies using economic concepts of demand and supply, substitution, externalities, and marginal utility. economic concepts are rarely disparate.

Demand Reduction

Deconstructing the CGC Highway

Increase Price of Vehicle Use

Pricing mechanisms, while effective in reducing vehicle use, may not be optimal for significantly reducing vehicle use.

Assuming that the SCG did not regulate the supply of vehicles, pricing mechanisms will only “price” out consumers who are unable to pay the increased price for using their vehicles

Supply Reduction

Reducing the Supply of Complements – Reducing Parking Supply

Subsidising Reduction of Vehicle Use- “No Driving Day” Campaign

Real estate values in the CGC district increased by an average of 30%.

Temperatures in the CGC area about 3oC to 6oC lower than surrounding areas.

What if Seoul City Government retained Highway but reformed the public transport system?