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Pricing Cars Off the Road: E-bike Substitution and Welfare Gains from Transport Pricing

Author

Listed:
  • Roth, Jakob
  • Schwab, Laura
  • Hintermann, Beat
  • Götschi, Thomas
  • Meister, Adrian
  • Meyer de Freitas, Lucas
  • Axhausen, Kay

Abstract

This study measures the extent to which Pigovian transport pricing induces a shift from driving to cycling. In a randomized controlled trial with 1,085 E-bike owners who also drive regularly, we monitor transport choices using a GPS-based tracking app. The pricing intervention reduces transport-related external costs by 7%, mainly in the form of local and national externalities. The underlying mechanism is a mode shift away from driving toward cycling. Estimating a discrete choice model to recover structural preference parameters, we find that a volumetric tax on driving would capture 81% of the intervention's welfare gains.

Suggested Citation

  • Roth, Jakob & Schwab, Laura & Hintermann, Beat & Götschi, Thomas & Meister, Adrian & Meyer de Freitas, Lucas & Axhausen, Kay, 2026. "Pricing Cars Off the Road: E-bike Substitution and Welfare Gains from Transport Pricing," CEPR Discussion Papers 21954, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:21954
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    Keywords

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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