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The Effect of a Congestion Charge on Traffic: The Case of London

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  • Wang, Chu
  • Xu, Jintao

Abstract

Based on very detailed monitoring data, we examine the effectiveness of the City of London’s congestion charge on traffic. Through multiple Regression Discontinuity Design estimations, we found that the introduction of the congestion charge had an immediate effect and brought significant social welfare, but the effect was diminished as time went on, which explains the need for periodic charge rate adjustments. Moreover, when the charges expanded to new zones, there was a spillover effect to the old zones. At the same time, the charge also affected drivers’ choice of when to drive.

Suggested Citation

  • Wang, Chu & Xu, Jintao, 2020. "The Effect of a Congestion Charge on Traffic: The Case of London," EfD Discussion Paper 20-11, Environment for Development, University of Gothenburg.
    • Handle: RePEc:hhs:gunefd:2020_011
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • 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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