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Rationing can backfire : the day without a car in Mexico City

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  • Eskeland, Gunnar S.
  • Feyzioglu, Tarhan

Abstract

In November 1989, Mexico City's administration imposed a regulation banning each car from driving on a specific day of the week. The regulation has been both popular and controversial. Some feel that it is a reasonable concession aimed at alleviating congestion and pollution problems. Others feel it is both inefficient and unfair: inefficient in the way most rationing systems are inefficent, and unfair in that it is costly to some and easily avoided or accommodated by others. Some feel that it may also be so inefficient that it is counterproductive. The authors found evidence to support that view. Many households bought an additional car to get additional driving permits, and the amount of driving increased. Greater use of old cars and increased weekend driving may have contributed to the disappointing results of Mexico's one-day ban on driving: high welfare costs and none of the intended benefits.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1554.

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Date of creation: 31 Dec 1995
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Handle: RePEc:wbk:wbrwps:1554

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Keywords: Roads&Highways; Economic Theory&Research; Environmental Economics&Policies; Financial Crisis Management&Restructuring; Country Strategy&Performance; Economic Theory&Research; Environmental Economics&Policies; Roads&Highways; Financial Crisis Management&Restructuring; Transport and Environment;

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  1. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 84(3), pages 488-500, August.
  2. Berndt, Ernst R. & Botero, German, 1985. "Energy demand in the transportation sector of Mexico," Journal of Development Economics, Elsevier, Elsevier, vol. 17(3), pages 219-238, April.
  3. Eskeland, Gunnar S, 1994. "A Presumptive Pigovian Tax: Complementing Regulation to Mimic an Emissions Fee," World Bank Economic Review, World Bank Group, World Bank Group, vol. 8(3), pages 373-94, September.
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Cited by:
  1. Francisco Gallego & Juan-Pablo Montero & Christian Salas, 2011. "The Effect of Transport Policies on Car Use: Theory and Evidence from Latin American Cities," Documentos de Trabajo, Instituto de Economia. Pontificia Universidad Católica de Chile. 407, Instituto de Economia. Pontificia Universidad Católica de Chile..
  2. Alva González, Miguel Ángel, 2008. "Environmentally Unfriendly Consumption Behaviour: Theoretical and Empirical Evidence from Private Motorists in Mexico City," MPRA Paper 18019, University Library of Munich, Germany.
  3. Viard, Brian & Fu, Shihe, 2011. "The effect of Beijing’s driving restrictions on pollution and economic activity," MPRA Paper 33009, University Library of Munich, Germany.
  4. Timilsina, Govinda R. & Dulal, Hari B., 2009. "A review of regulatory instruments to control environmental externalities from the transport sector," Policy Research Working Paper Series 4867, The World Bank.
  5. Carlos Alberto Medina & Carlos Eduardo Vélez, 2011. "Aglomeración económica y congestión vial: los perjuicios por racionamiento del tráfico vehicular," BORRADORES DE ECONOMIA 009085, BANCO DE LA REPÚBLICA.
  6. Heil, Mark & Pargal, Sheoli, 1998. "Reducing air pollution from urban passenger transport : a framework for policy analysis," Policy Research Working Paper Series 1991, The World Bank.
  7. Eskeland, Gunnar S. & Mideksa, Torben K., 2008. "Transportation fuel use, technology and standards: The role of credibility and expectations," Policy Research Working Paper Series 4695, The World Bank.
  8. Eskeland, Gunnar S., 2000. "Externalities and production efficiency," Policy Research Working Paper Series 2319, The World Bank.
  9. Gunnar S. Eskeland & Jian Xie, 1998. "Acting Globally while Thinking Locally: Is the Global Environment Protected by Transport Emission Control Programs?," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 385-411, November.
  10. Eskeland, Gunnar & Chingying Kong, 1998. "Protecting the environment and the poor - a public goods framework applied to Indonesia," Policy Research Working Paper Series 1961, The World Bank.
  11. Santos, Georgina & Behrendt, Hannah & Maconi, Laura & Shirvani, Tara & Teytelboym, Alexander, 2010. "Part I: Externalities and economic policies in road transport," Research in Transportation Economics, Elsevier, Elsevier, vol. 28(1), pages 2-45.
  12. Wang, Rui, 2010. "Shaping urban transport policies in China: Will copying foreign policies work?," Transport Policy, Elsevier, vol. 17(3), pages 147-152, May.
  13. Gallego, Francisco & Montero, Juan-Pablo & Salas, Christian, 2013. "The effect of transport policies on car use: Evidence from Latin American cities," Journal of Public Economics, Elsevier, Elsevier, vol. 107(C), pages 47-62.
  14. Crôtte, Amado & Noland, Robert B. & Graham, Daniel J., 2010. "An analysis of gasoline demand elasticities at the national and local levels in Mexico," Energy Policy, Elsevier, Elsevier, vol. 38(8), pages 4445-4456, August.
  15. Parry, Ian W.H. & Timilsina, Govinda R., 2009. "Pricing externalities from passenger transportation in Mexico city," Policy Research Working Paper Series 5071, The World Bank.
  16. Gallego, Francisco & Montero, Juan-Pablo & Salas, Christian, 2013. "The effect of transport policies on car use: A bundling model with applications," Energy Economics, Elsevier, Elsevier, vol. 40(S1), pages S85-S97.
  17. Zhu, Shanjiang & Du, Longyuan & Zhang, Lei, 2013. "Rationing and pricing strategies for congestion mitigation: Behavioral theory, econometric model, and application in Beijing," Transportation Research Part B: Methodological, Elsevier, Elsevier, vol. 57(C), pages 210-224.

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