IDEAS home Printed from https://ideas.repec.org/p/zbw/glodps/1006.html
   My bibliography  Save this paper

Do Economic Incentives Promote Physical Activity? Evidence from the London Congestion Charge

Author

Listed:
  • Nakamura, Ryota
  • Albanese, Andrea
  • Coombes, Emma
  • Suhrcke, Marc

Abstract

This study investigates the impact of economic incentives on travel-related physical activity, leveraging the London Congestion Charge's disincentivising of sedentary travel modes via increasing the cost of private car use within Central London. The scheme imposes charges on most types of cars entering, exiting and operating within the Central London area, while individuals living inside the charging zone are eligible for a 90% reduction in congestion charges. Geographical location information provides the full-digit postcode data necessary to precisely identify the eligibility for the discount of participants in the London Travel Demand Survey for the period 2005-2011. Using a boundary regression-discontinuity design reveals a statistically significant but small impact on active commuting (i.e. cycling and walking) around the border of the charging zone. The effect is larger for lower-income households and car owners. The findings are robust against multiple specifications and validation tests.

Suggested Citation

  • Nakamura, Ryota & Albanese, Andrea & Coombes, Emma & Suhrcke, Marc, 2021. "Do Economic Incentives Promote Physical Activity? Evidence from the London Congestion Charge," GLO Discussion Paper Series 1006, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1006
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/248276/1/GLO-DP-1006.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Heather Royer & Mark Stehr & Justin Sydnor, 2015. "Incentives, Commitments, and Habit Formation in Exercise: Evidence from a Field Experiment with Workers at a Fortune-500 Company," American Economic Journal: Applied Economics, American Economic Association, vol. 7(3), pages 51-84, July.
    2. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 577-599.
    3. Finkelstein, Eric A. & Bilger, Marcel & Baid, Drishti, 2019. "Effectiveness and cost-effectiveness of incentives as a tool for prevention of non-communicable diseases: A systematic review," Social Science & Medicine, Elsevier, vol. 232(C), pages 340-350.
    4. Matias D. Cattaneo & Michael Jansson & Xinwei Ma, 2020. "Simple Local Polynomial Density Estimators," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 115(531), pages 1449-1455, July.
    5. Jonathan Leape, 2006. "The London Congestion Charge," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 157-176, Fall.
    6. Cawley, John & Ruhm, Christopher J., 2011. "The Economics of Risky Health Behaviors," Handbook of Health Economics, in: Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), Handbook of Health Economics, volume 2, chapter 0, pages 95-199, Elsevier.
    7. Matias D. Cattaneo & Michael Jansson & Xinwei Ma, 2020. "Local Regression Distribution Estimators," Papers 2009.14367, arXiv.org, revised Jan 2021.
    8. Xavier Giné & Dean Karlan & Jonathan Zinman, 2010. "Put Your Money Where Your Butt Is: A Commitment Contract for Smoking Cessation," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 213-235, October.
    9. Gary Charness & Uri Gneezy, 2009. "Incentives to Exercise," Econometrica, Econometric Society, vol. 77(3), pages 909-931, May.
    10. Markus Goldstein & Christopher Udry, 2008. "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 981-1022, December.
    11. Bisakha Sen, 2012. "Is There an Association Between Gasoline Prices and Physical Activity? Evidence from American Time Use Data," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(2), pages 338-366, March.
    12. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    13. Charles Courtemanche, 2011. "A Silver Lining? The Connection Between Gasoline Prices And Obesity," Economic Inquiry, Western Economic Association International, vol. 49(3), pages 935-957, July.
    14. Tang, Cheng Keat, 2021. "The Cost of Traffic: Evidence from the London Congestion Charge," Journal of Urban Economics, Elsevier, vol. 121(C).
    15. Jeremy R. Magruder, 2012. "High Unemployment Yet Few Small Firms: The Role of Centralized Bargaining in South Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 138-166, July.
    16. Martin, Adam & Morciano, Marcello & Suhrcke, Marc, 2021. "Determinants of bicycle commuting and the effect of bicycle infrastructure investment in London: Evidence from UK census microdata," Economics & Human Biology, Elsevier, vol. 41(C).
    17. Yaniv, Gideon & Rosin, Odelia & Tobol, Yossef, 2009. "Junk-food, home cooking, physical activity and obesity: The effect of the fat tax and the thin subsidy," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 823-830, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simone Schaner, 2018. "The Persistent Power of Behavioral Change: Long-Run Impacts of Temporary Savings Subsidies for the Poor," American Economic Journal: Applied Economics, American Economic Association, vol. 10(3), pages 67-100, July.
    2. Eszter Czibor & David Jimenez‐Gomez & John A. List, 2019. "The Dozen Things Experimental Economists Should Do (More of)," Southern Economic Journal, John Wiley & Sons, vol. 86(2), pages 371-432, October.
    3. Ryota Nakamura & Marc Suhrcke & Daniel John Zizzo, 2017. "A triple test for behavioral economics models and public health policy," Theory and Decision, Springer, vol. 83(4), pages 513-533, December.
    4. Cabane Charlotte & Lechner Michael, 2015. "Physical Activity of Adults: A Survey of Correlates, Determinants, and Effects," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 376-402, August.
    5. Allais, Olivier & Bazoche, Pascale & Teyssier, Sabrina, 2017. "Getting more people on the stairs: The impact of point-of-decision prompts," Social Science & Medicine, Elsevier, vol. 192(C), pages 18-27.
    6. Matias D. Cattaneo & Rocío Titiunik, 2022. "Regression Discontinuity Designs," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 821-851, August.
    7. Idris Adjerid & Rachael Purta & Aaron Striegel & George Loewenstein, 2018. "Aggressive Economic Incentives and Physical Activity: The Role of Choice and Technology Decision Aids," Papers 1810.06698, arXiv.org, revised Nov 2018.
    8. Zarko Kalamov & Marco Runkel, 2020. "Present-Focused Preferences and Sin Goods Consumption at the Extensive and Intensive Margins," CESifo Working Paper Series 8237, CESifo.
    9. Itzik Fadlon & Torben Heien Nielsen, 2019. "Family Health Behaviors," American Economic Review, American Economic Association, vol. 109(9), pages 3162-3191, September.
    10. Collin, Matthew & Talbot, Theodore, 2023. "Are age-of-marriage laws enforced? Evidence from developing countries," Journal of Development Economics, Elsevier, vol. 160(C).
    11. Andrej Woerner & Giorgia Romagnoli & Birgit M. Probst & Nina Bartmann & Jonathan N. Cloughesy & Jan Willem Lindemans, 2021. "Should Individuals Choose Their Own Incentives? Evidence from a Mindfulness Meditation Intervention," CESifo Working Paper Series 9494, CESifo.
    12. Idris Adjerid & George Loewenstein & Rachael Purta & Aaron Striegel, 2022. "Gain-Loss Incentives and Physical Activity: The Role of Choice and Wearable Health Tools," Management Science, INFORMS, vol. 68(4), pages 2642-2667, April.
    13. Finkelstein, Eric A. & Bilger, Marcel & Baid, Drishti, 2019. "Effectiveness and cost-effectiveness of incentives as a tool for prevention of non-communicable diseases: A systematic review," Social Science & Medicine, Elsevier, vol. 232(C), pages 340-350.
    14. Erev, Ido & Hiller, Maximilian & Klößner, Stefan & Lifshitz, Gal & Mertins, Vanessa & Roth, Yefim, 2022. "Promoting healthy behavior through repeated deposit contracts: An intervention study," Journal of Economic Psychology, Elsevier, vol. 92(C).
    15. Blaise Melly & Rafael Lalive, 2020. "Estimation, Inference, and Interpretation in the Regression Discontinuity Design," Diskussionsschriften dp2016, Universitaet Bern, Departement Volkswirtschaft.
    16. Katherine L. Milkman & Julia A. Minson & Kevin G. M. Volpp, 2014. "Holding the Hunger Games Hostage at the Gym: An Evaluation of Temptation Bundling," Management Science, INFORMS, vol. 60(2), pages 283-299, February.
    17. Daniel Mochon & Janet Schwartz & Josiase Maroba & Deepak Patel & Dan Ariely, 2017. "Gain Without Pain: The Extended Effects of a Behavioral Health Intervention," Management Science, INFORMS, vol. 63(1), pages 58-72, January.
    18. Baillon, Aurélien & Capuno, Joseph & O'Donnell, Owen & Tan, Carlos Antonio & van Wilgenburg, Kim, 2022. "Persistent effects of temporary incentives: Evidence from a nationwide health insurance experiment," Journal of Health Economics, Elsevier, vol. 81(C).
    19. Marit Hinnosaar, 2023. "The Persistence of Healthy Behaviors in Food Purchasing," Marketing Science, INFORMS, vol. 42(3), pages 521-537, May.
    20. Maurício Benegas & José Raimundo Carvalho & Márcio Veras Corrêa, 2022. "Non‐aggression commitments and domestic violence margins," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(1), pages 67-99, January.

    More about this item

    Keywords

    economic incentive; health behaviour; London Congestion Charge; geographical information system; regression-discontinuity;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:zbw:glodps:1006. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/glabode.html .

    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.