IDEAS home Printed from https://ideas.repec.org/a/cup/jbcoan/v14y2023i2p251-274_4.html
   My bibliography  Save this article

The Welfare Cost of Beijing’s Lottery Policy: Evidence from a Contingent Valuation Survey

Author

Listed:
  • Qin, Ping
  • Quan, Yifei
  • Liu, Antung A.
  • Linn, Joshua
  • Yang, Jun

Abstract

Motivated by traffic congestion and air pollution, Beijing is one of several major cities to restrict vehicle ownership by requiring residents to win a lottery for the right to obtain an additional car. We examine the welfare cost of preventing people from owning cars because of misallocation: under a lottery, some individuals with low willingness to pay (WTP) for cars can obtain cars, while other individuals with high WTP cannot. We estimate welfare costs using a new contingent valuation method survey of Beijing lottery participants which we designed and conducted explicitly for this purpose. We find that restricting vehicle ownership reduced private welfare by 26 billion yuan. Back-of-the-envelope calculations suggest that the benefits of lower congestion and pollution roughly equal the costs. Our WTP estimates indicate a net welfare gain of approximately 32 billion yuan if Beijing’s lottery were replaced with an auction, which is similar to previous estimates.

Suggested Citation

  • Qin, Ping & Quan, Yifei & Liu, Antung A. & Linn, Joshua & Yang, Jun, 2023. "The Welfare Cost of Beijing’s Lottery Policy: Evidence from a Contingent Valuation Survey," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 14(2), pages 251-274, July.
  • Handle: RePEc:cup:jbcoan:v:14:y:2023:i:2:p:251-274_4
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S219458882300009X/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jbcoan:v:14:y:2023:i:2:p:251-274_4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/bca .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.