IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v53y2012i4p553-575.html
   My bibliography  Save this article

Paying for Pollution? How General Equilibrium Effects Undermine the “Spare the Air” Program

Author

Listed:
  • Steven Sexton

Abstract

Policy-makers have relied on non-coercive mechanisms to achieve socially preferred outcomes in a variety of contexts when prices fail to ration scarce resources. Amid heightened concern about environmental damage and climate change, public appeals for cooperation and pecuniary incentives are frequently used to achieve resource conservation and other prosocial behavior. Yet the relative effectiveness of these two instruments is poorly understood when pecuniary incentives are small. This paper examines the extent to which free transit fares and appeals for car trip avoidance reduce car pollution on smoggy days. Using data on freeway traffic volumes and transit ridership, public appeals for cooperation are shown to have no significant effect on car trip demand. Free transit fares, however, do have a significant effect on car trip demand. But the effect is perverse in that it generates an increase in car trips and related pollution. Free fares also increase transit ridership. These results suggest that free transit rides do not induce motorists to substitute to transit, but instead subsidize regular transit rides and additional trips. Appeals for cooperation have no affect on carpooling behavior. Copyright Springer Science+Business Media B.V. 2012

Suggested Citation

  • Steven Sexton, 2012. "Paying for Pollution? How General Equilibrium Effects Undermine the “Spare the Air” Program," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(4), pages 553-575, December.
    • Handle: RePEc:kap:enreec:v:53:y:2012:i:4:p:553-575
    DOI: 10.1007/s10640-012-9577-z
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10640-012-9577-z
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10640-012-9577-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
    2. A. E. Peck & O. C. Doering III, 1976. "Voluntarism and Price Response: Consumer Reaction to the Energy Shortage," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 287-292, Spring.
    3. Gabor Kezdi, 2005. "Robus Standard Error Estimation in Fixed-Effects Panel Models," Econometrics 0508018, University Library of Munich, Germany.
    4. Cutter, W. Bowman & Neidell, Matthew, 2009. "Voluntary information programs and environmental regulation: Evidence from 'Spare the Air'," Journal of Environmental Economics and Management, Elsevier, vol. 58(3), pages 253-265, November.
    5. Jean Tirole & Roland Bénabou, 2006. "Incentives and Prosocial Behavior," American Economic Review, American Economic Association, vol. 96(5), pages 1652-1678, December.
    6. Bruno S. Frey, 1997. "Not Just for the Money," Books, Edward Elgar Publishing, number 1183.
    7. A. Colin Cameron & Douglas L. Miller, 2010. "Robust Inference with Clustered Data," Working Papers 318, University of California, Davis, Department of Economics.
    8. Cameron, A. Colin & Gelbach, Jonah B. & Miller, Douglas L., 2011. "Robust Inference With Multiway Clustering," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(2), pages 238-249.
    9. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    10. Peter C. Reiss & Matthew W. White, 2008. "What changes energy consumption? Prices and public pressures," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 636-663, September.
    11. Bruno S. Frey & Reto Jegen, 2001. "Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
    12. Graff Zivin, Joshua & Neidell, Matthew, 2009. "Days of haze: Environmental information disclosure and intertemporal avoidance behavior," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 119-128, September.
    13. Ronald Cummings & Mary Beth Walker, 2000. "Measuring the effectiveness of voluntary emission reduction programmes," Applied Economics, Taylor & Francis Journals, vol. 32(13), pages 1719-1726.
    14. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    15. 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.
    16. Dan Ariely & Anat Bracha & Stephan Meier, 2009. "Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially," American Economic Review, American Economic Association, vol. 99(1), pages 544-555, March.
    17. Akerlof, George A & Dickens, William T, 1982. "The Economic Consequences of Cognitive Dissonance," American Economic Review, American Economic Association, vol. 72(3), pages 307-319, June.
    18. Chen, Chao, 2003. "Freeway Performance Measurement System (PeMS)," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt6j93p90t, Institute of Transportation Studies, UC Berkeley.
    19. Janssen, Maarten C. W. & Mendys-Kamphorst, Ewa, 2004. "The price of a price: on the crowding out and in of social norms," Journal of Economic Behavior & Organization, Elsevier, vol. 55(3), pages 377-395, November.
    20. Mitchell A. Petersen, 2009. "Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches," The Review of Financial Studies, Society for Financial Studies, vol. 22(1), pages 435-480, January.
    21. A. Colin Cameron & Douglas L. Miller, 2010. "Robust Inference with Clustered Data," Working Papers 107, University of California, Davis, Department of Economics.
    22. David S. Lee & Enrico Moretti & Matthew J. Butler, 2004. "Do Voters Affect or Elect Policies? Evidence from the U. S. House," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(3), pages 807-859.
    23. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    24. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
    25. Lee, David S., 2008. "Randomized experiments from non-random selection in U.S. House elections," Journal of Econometrics, Elsevier, vol. 142(2), pages 675-697, February.
    26. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
    27. Mayer, Lawrence S., 1978. "Estimating the effects of the onset of the energy crisis on residential energy demand," Resources and Energy, Elsevier, vol. 1(1), pages 57-92, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dangel, Alexander & Goeschl, Timo, 2022. "Air Quality Alerts and Don't Drive Appeals: Cautionary Evidence from Germany," Working Papers 0718, University of Heidelberg, Department of Economics.
    2. Hamilton, Timothy L. & Wichman, Casey J., 2018. "Bicycle infrastructure and traffic congestion: Evidence from DC's Capital Bikeshare," Journal of Environmental Economics and Management, Elsevier, vol. 87(C), pages 72-93.
    3. Beaudoin, Justin & Lin Lawell, C.-Y. Cynthia, 2018. "The effects of public transit supply on the demand for automobile travel," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 447-467.

    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. Sexton, Steven E., 2010. "Rationing Public Goods by Cooperation or Pecuniary Incentives: Evidence from the Spare-the-Air Program," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5xs9r6t8, Department of Agricultural & Resource Economics, UC Berkeley.
    2. Cecere, Grazia & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Waste prevention and social preferences: the role of intrinsic and extrinsic motivations," Ecological Economics, Elsevier, vol. 107(C), pages 163-176.
    3. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    4. Jean Tirole & Roland Bénabou, 2006. "Incentives and Prosocial Behavior," American Economic Review, American Economic Association, vol. 96(5), pages 1652-1678, December.
    5. Quoc-Anh Do & Yen-Teik Lee & Bang Dang Nguyen, 2016. "Directors as Connectors: The Impact of the External Networks of Directors on Firms," Sciences Po publications 52, Sciences Po.
    6. Natalie Gold, 2019. "The limits of commodification arguments: Framing, motivation crowding, and shared valuations," Politics, Philosophy & Economics, , vol. 18(2), pages 165-192, May.
    7. Goette, Lorenz & Stutzer, Alois, 2020. "Blood donations and incentives: Evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 52-74.
    8. Mauricio Villamizar‐Villegas & Freddy A. Pinzon‐Puerto & Maria Alejandra Ruiz‐Sanchez, 2022. "A comprehensive history of regression discontinuity designs: An empirical survey of the last 60 years," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1130-1178, September.
    9. Dan Ariely & Anat Bracha & Stephan Meier, 2009. "Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially," American Economic Review, American Economic Association, vol. 99(1), pages 544-555, March.
    10. Quoc-Anh Do & Yen-Teik Lee & Bang Dang Nguyen, 2016. "Directors as Connectors: The Impact of the External Networks of Directors on Firms," Post-Print hal-03393196, HAL.
    11. Papaioannou, Elias & Michalopoulos, Stelios, 2010. "Divide and Rule or the Rule of the Divided? Evidence from Africa," CEPR Discussion Papers 8088, C.E.P.R. Discussion Papers.
    12. Grischa Perino & Luca A. Panzone & Timothy Swanson, 2014. "Motivation Crowding In Real Consumption Decisions: Who Is Messing With My Groceries?," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 592-607, April.
    13. Holmås, Tor Helge & Kjerstad, Egil & Lurås, Hilde & Straume, Odd Rune, 2010. "Does monetary punishment crowd out pro-social motivation? A natural experiment on hospital length of stay," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 261-267, August.
    14. Kirsten Bregn, 2013. "Detrimental Effects of Performance-Related Pay in the Public Sector? On the Need for a Broader Theoretical Perspective," Public Organization Review, Springer, vol. 13(1), pages 21-35, March.
    15. Huber, Martin, 2019. "An introduction to flexible methods for policy evaluation," FSES Working Papers 504, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    16. Banerjee, Prasenjit & Shogren, Jason F., 2012. "Fat-tail Climate Risks, Mechanism design, and Reputation," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124920, Agricultural and Applied Economics Association.
    17. Andreas Bernecker, 2014. "Divided We Reform? Evidence from US Welfare Policies," CESifo Working Paper Series 4564, CESifo.
    18. repec:hal:spmain:info:hdl:2441/5q8d3q8agf8hdbs42laqdfujkb is not listed on IDEAS
    19. Banerjee, Prasenjit & Shogren, Jason F., 2012. "Material interests, moral reputation, and crowding out species protection on private land," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 137-149.
    20. Jingze Jiang, 2016. "Peer Pressure in Voluntary Environmental Programs: a Case of the Bag Rewards Program," Journal of Industry, Competition and Trade, Springer, vol. 16(2), pages 155-190, June.
    21. ITO Koichiro & IDA Takanori & TANAKA Makoto, 2015. "The Persistence of Moral Suasion and Economic Incentives: Field experimental evidence from energy demand," Discussion papers 15014, Research Institute of Economy, Trade and Industry (RIETI).

    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:kap:enreec:v:53:y:2012:i:4:p:553-575. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.