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Designing effective and acceptable road pricing schemes: evidence from the Geneva congestion charge

Baranzini, Andrea, Carattini, Stefano and Tesauro, Linda (2021) Designing effective and acceptable road pricing schemes: evidence from the Geneva congestion charge. Environmental and Resource Economics, 79 (3). 417 - 482. ISSN 0924-6460

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Identification Number: 10.1007/s10640-021-00564-y

Abstract

While instruments to price congestion exist since the 1970s, less than a dozen cities around the world have a cordon or zone pricing scheme. Geneva, Switzerland, may be soon joining them. This paper builds on a detailed review of the existing schemes to identify a set of plausible design options for the Geneva congestion charge. In turn, it analyzes their acceptability, leveraging a large survey of residents of both Geneva and the surrounding areas of Switzerland and France. Our original approach combines a discrete choice experiment with randomized informational treatments. We consider an extensive set of attributes, such as perimeter, price and price modulation, use of revenues, and exemption levels and beneficiaries. The informational treatments address potential biased beliefs concerning the charge’s expected effects on congestion and pollution. We find that public support depends crucially on the policy design. We identify an important demand for exemptions, which, albeit frequently used in the design of environmental taxation, is underexplored in the analysis of public support. This demand for exemptions is not motivated by efficiency reasons. It comes mostly by local residents, for local residents. Further, people show a marked preference for constant prices, even if efficiency would point to dynamic pricing based on external costs. Hence, we highlight a clear trade-off between efficiency and acceptability. However, we also show, causally, that this gap can in part be closed, with information provision. Analyzing heterogeneity, we show that preferences vary substantially with where people live and how they commute. Even so, we identify several designs that reach majority support.

Item Type: Article
Official URL: https://www.springer.com/journal/10640
Additional Information: © 2021 The Authors
Divisions: Grantham Research Institute
Economics
Subjects: H Social Sciences > HE Transportation and Communications
G Geography. Anthropology. Recreation > GE Environmental Sciences
JEL classification: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy
R - Urban, Rural, and Regional Economics > R4 - Transportation Systems > R41 - Transportation: Demand, Supply, and Congestion; Safety and Accidents; Transportation Noise
R - Urban, Rural, and Regional Economics > R4 - Transportation Systems > R48 - Government Pricing; Regulatory Policies
Date Deposited: 16 Jun 2021 11:42
Last Modified: 20 Aug 2021 00:36
URI: http://eprints.lse.ac.uk/id/eprint/110870

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