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The effect of road pricing on traffic composition: Evidence from a natural experiment in Milan, Italy

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  • Percoco, Marco

Abstract

This paper aims to estimate the effect of road pricing on the composition of traffic. By considering the case of Milan, where a charge to enter the city centre was introduced in 2008, and by relying on an unexpected and temporary suspension of the tax, we analyse the effect of the policy on flows of vehicles classified by type of engine. We have found that a road pricing scheme shifted users from Euro 0–3 vehicles (i.e., those vehicles particularly polluting according to the European Emission Standards classification and produced before 2000–2001) to liquefied petroleum gas, bi-fuel and hybrid vehicles. However, the environmental benefits of the policy were limited by a substantial increase in the usage of motorbikes. This evidence calls for a consideration of the behavioural reactions of road users when making ex ante evaluations of the social profitability of road pricing schemes.

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  • Percoco, Marco, 2014. "The effect of road pricing on traffic composition: Evidence from a natural experiment in Milan, Italy," Transport Policy, Elsevier, vol. 31(C), pages 55-60.
    • Handle: RePEc:eee:trapol:v:31:y:2014:i:c:p:55-60
    DOI: 10.1016/j.tranpol.2013.12.001
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    Cited by:

    1. Paolo Maranzano & Alessandro Fassò & Matteo Pelagatti & Manfred Mudelsee, 2020. "Statistical Modeling of the Early-Stage Impact of a New Traffic Policy in Milan, Italy," IJERPH, MDPI, vol. 17(3), pages 1-22, February.
    2. Andrea Baranzini & Stefano Carattini & Linda Tesauro, 2021. "Designing Effective and Acceptable Road Pricing Schemes: Evidence from the Geneva Congestion Charge," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(3), pages 417-482, July.
    3. Ihab Kaddoura & Kai Nagel, 2018. "Simultaneous internalization of traffic congestion and noise exposure costs," Transportation, Springer, vol. 45(5), pages 1579-1600, September.
    4. Morton, Craig & Mattioli, Giulio & Anable, Jillian, 2021. "Public acceptability towards Low Emission Zones: The role of attitudes, norms, emotions, and trust," Transportation Research Part A: Policy and Practice, Elsevier, vol. 150(C), pages 256-270.
    5. Agarwal, Sumit & Koo, Kang Mo, 2016. "Impact of electronic road pricing (ERP) changes on transport modal choice," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 1-11.
    6. Percoco, Marco, 2014. "The impact of road pricing on housing prices: Preliminary evidence from Milan," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 188-194.
    7. Loo, Becky P.Y. & Huang, Zhiran, 2021. "Delineating traffic congestion zones in cities: An effective approach based on GIS," Journal of Transport Geography, Elsevier, vol. 94(C).
    8. Axsen, Jonn & Wolinetz, Michael, 2021. "Taxes, tolls and ZEV zones for climate: Synthesizing insights on effectiveness, efficiency, equity, acceptability and implementation," Energy Policy, Elsevier, vol. 156(C).
    9. Cornago, Elisabetta & Dimitropoulos, Alexandros & Oueslati, Walid, 2023. "The impact of urban road pricing on the use of bike sharing," Journal of Environmental Economics and Management, Elsevier, vol. 120(C).
    10. Morton, Craig & Lovelace, Robin & Anable, Jillian, 2017. "Exploring the effect of local transport policies on the adoption of low emission vehicles: Evidence from the London Congestion Charge and Hybrid Electric Vehicles," Transport Policy, Elsevier, vol. 60(C), pages 34-46.
    11. 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).
    12. Agarwal, Amit & Ziemke, Dominik & Nagel, Kai, 2020. "Bicycle superhighway: An environmentally sustainable policy for urban transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 137(C), pages 519-540.
    13. 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.
    14. Hardman, Scott, 2019. "Understanding the impact of reoccurring and non-financial incentives on plug-in electric vehicle adoption – A review," Transportation Research Part A: Policy and Practice, Elsevier, vol. 119(C), pages 1-14.
    15. 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.

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