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Heterogeneity in the reaction of traffic flows to road pricing: a synthetic control approach applied to Milan

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  • Marco Percoco

Abstract

Local governments are increasingly adopting road pricing schemes to curb pollution and congestion in the cities. Despite its popularity, few empirical studies have made an attempt to estimate the effectiveness of such interventions. The aim of this paper is to assess the impact of road pricing on traffic flows by means of a synthetic control approach which allows for a wide heterogeneity of treatment effects. By using a large sample of 75 types of vehicles entering the centre of Milan between 2008 and 2012, we evaluate the enforcement of the road pricing scheme occurred in January 2012 across 20 types of vehicles. We have found a large variation in the reaction of traffic flows and a significant effect in terms of vehicles reduction after pricing for cars and for some types of commercial vehicles. Interestingly and surprisingly, no effect is detected for vehicles whose access in the city centre was forbidden. Copyright Springer Science+Business Media New York 2015

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  • Marco Percoco, 2015. "Heterogeneity in the reaction of traffic flows to road pricing: a synthetic control approach applied to Milan," Transportation, Springer, vol. 42(6), pages 1063-1079, November.
    • Handle: RePEc:kap:transp:v:42:y:2015:i:6:p:1063-1079
    DOI: 10.1007/s11116-014-9544-3
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    2. Daniel Albalate & Germà Bel, 2018. "“Do government formation deadlocks damage economic growth? Evidence from history’s longest period of political deadlock”," IREA Working Papers 201817, University of Barcelona, Research Institute of Applied Economics, revised Jul 2018.
    3. Hannes Wallimann & Kevin Blattler & Widar von Arx, 2021. "Do price reductions attract customers in urban public transport? A synthetic control approach," Papers 2111.14613, arXiv.org, revised Mar 2022.
    4. Wallimann, Hannes & Blättler, Kevin & von Arx, Widar, 2023. "Do price reductions attract customers in urban public transport? A synthetic control approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 173(C).
    5. Cattaneo, Mattia & Malighetti, Paolo & Percoco, Marco, 2018. "The impact of intercontinental air accessibility on local economies: Evidence from the de-hubbing of malpensa airport," Transport Policy, Elsevier, vol. 61(C), pages 96-105.
    6. Ihab Kaddoura & Kai Nagel, 2018. "Simultaneous internalization of traffic congestion and noise exposure costs," Transportation, Springer, vol. 45(5), pages 1579-1600, September.
    7. Percoco, Marco, 2021. "A formal test of the long-term environmental effects of road pricing in Milan," Research in Transportation Economics, Elsevier, vol. 85(C).
    8. D’Arcangelo, Filippo Maria & Percoco, Marco, 2015. "Housing rent and road pricing in Milan: Evidence from a geographical discontinuity approach," Transport Policy, Elsevier, vol. 44(C), pages 108-116.
    9. Chinmay Maheshwari & Kshitij Kulkarni & Druv Pai & Jiarui Yang & Manxi Wu & Shankar Sastry, 2024. "Congestion Pricing for Efficiency and Equity: Theory and Applications to the San Francisco Bay Area," Papers 2401.16844, arXiv.org.
    10. Amit Agarwal & Benjamin Kickhöfer, 2018. "The correlation of externalities in marginal cost pricing: lessons learned from a real-world case study," Transportation, Springer, vol. 45(3), pages 849-873, May.
    11. Valeriia Budiakivska & Luca Casolaro, 2018. "Please in my back yard: the private and public benefits of a new tram line in Florence," Temi di discussione (Economic working papers) 1161, Bank of Italy, Economic Research and International Relations Area.
    12. Daniel Albalate & Germà Bel & Ferran A. Mazaira-Font, 2021. "Decoupling synthetic control methods to ensure stability, accuracy and meaningfulness," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(4), pages 549-584, December.

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