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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.

Suggested Citation

  • 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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    References listed on IDEAS

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    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.
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    11. Marco Percoco, 2010. "Urban Transport Policies And The Environment: Evidence From Italy," Articles, International Journal of Transport Economics, vol. 37(2).
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    Cited by:

    1. repec:eee:trapol:v:60:y:2017:i:c:p:34-46 is not listed on IDEAS
    2. 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.
    3. 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.
    4. 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.
    5. repec:kap:transp:v:45:y:2018:i:3:d:10.1007_s11116-016-9753-z is not listed on IDEAS

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