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Green cars sterilize congestion charges: A model analysis of the reduced impact of Stockholm road tolls

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  • Hultkrantz, Lars
  • Liu, Xing

Abstract

Before–after comparisons indicate that the impact of the road toll in Stockholm on traffic volumes was smaller when the system was re-opened in 2007, compared to the effect during the trial in 2006. We calibrate a modal-choice model on data for Stockholm from before and during the trial and use it to simulate the effects of some seemingly subtle changes of the design of the congestion-charge scheme. We find that the growth of the share of exempted “green” cars and the decision to make charges deductible from the income tax was about to considerably reduce the positive welfare effect of the toll at the time when the “green” car exemption was abolished.

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  • Hultkrantz, Lars & Liu, Xing, 2012. "Green cars sterilize congestion charges: A model analysis of the reduced impact of Stockholm road tolls," Transport Policy, Elsevier, vol. 21(C), pages 110-118.
    • Handle: RePEc:eee:trapol:v:21:y:2012:i:c:p:110-118
    DOI: 10.1016/j.tranpol.2012.03.001
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    1. Börjesson, Maria & Eliasson, Jonas & Hugosson, Muriel B. & Brundell-Freij, Karin, 2012. "The Stockholm congestion charges—5 years on. Effects, acceptability and lessons learnt," Transport Policy, Elsevier, vol. 20(C), pages 1-12.
    2. Eliasson, Jonas, 2009. "A cost-benefit analysis of the Stockholm congestion charging system," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(4), pages 468-480, May.
    3. Small, Kenneth A. & Yan, Jia, 2001. "The Value of "Value Pricing" of Roads: Second-Best Pricing and Product Differentiation," Journal of Urban Economics, Elsevier, vol. 49(2), pages 310-336, March.
    4. Glazer, Amihai & Niskanen, Esko, 2000. "Which consumers benefit from congestion tolls?," University of California Transportation Center, Working Papers qt70v033nx, University of California Transportation Center.
    5. Isaksson, Karolina & Richardson, Tim, 2009. "Building legitimacy for risky policies: The cost of avoiding conflict in Stockholm," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(3), pages 251-257, March.
    6. Richard Arnott & An Yan, 2000. "The Two-Mode Problem: Second-Best Pricing and Capacity," Boston College Working Papers in Economics 474, Boston College Department of Economics.
    7. Armelius, Hanna & Hultkrantz, Lars, 2006. "The politico-economic link between public transport and road pricing: An ex-ante study of the Stockholm road-pricing trial," Transport Policy, Elsevier, vol. 13(2), pages 162-172, March.
    8. Kutzbach, Mark J., 2009. "Motorization in developing countries: Causes, consequences, and effectiveness of policy options," Journal of Urban Economics, Elsevier, vol. 65(2), pages 154-166, March.
    9. Kottenhoff, Karl & Brundell Freij, Karin, 2009. "The role of public transport for feasibility and acceptability of congestion charging - The case of Stockholm," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(3), pages 297-305, March.
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    14. Small, Kenneth A., 2001. "The Value of Pricing," University of California Transportation Center, Working Papers qt0rm449sx, University of California Transportation Center.
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    Cited by:

    1. Whitehead, Jake & Franklin, Joel P. & Washington, Simon, 2014. "The impact of a congestion pricing exemption on the demand for new energy efficient vehicles in Stockholm," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 24-40.
    2. Jonas Westin, 2011. "Labor Market Effects of Road Pricing in a Population with Continuously Distributed Value of Time," ERSA conference papers ersa10p1458, European Regional Science Association.
    3. André de Palma & Robin Lindsey, 2009. "Traffic Congestion Pricing Methods and Technologies," Working Papers hal-00414526, HAL.
    4. Shewmake, Sharon & Jarvis, Lovell, 2014. "Hybrid cars and HOV lanes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 304-319.

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    More about this item

    Keywords

    Congestion pricing; Equity effects; Modal choice;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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