This paper evaluates the efficacy of the urban growth boundary (UGB) as a second-best
substitute for a first-best toll regime in a congested city. Numerical results show that, while a
UGB is welfare-improving, validating previous theoretical results, the utility gain it generates
is a very small fraction of that achieved under a toll regime. Thus, the paper suggests that a
UGB may not be a useful instrument for attacking the distortions caused by unpriced traffic
congestion.