Highway toll and air pollution: evidence from Chinese cities

Fu, Shihe and Gu, Yizhen (2014): Highway toll and air pollution: evidence from Chinese cities.

Abstract

Most highways in urban China are tolled to finance their construction. During the eight-day National Day holiday in 2012, highway tolls are waived nationwide for passenger vehicles. We use this to test highway tolls’ effect on air pollution. Using daily pollution and weather data for 98 Chinese cities in 2011 and 2012 and employing both a regression discontinuity design and differences-in-differences method with 2011 National Day holiday as a control, we find that eliminating tolls increases pollution by 20% and decreases visibility by one kilometer. We also estimate that the toll elasticity of air pollution is 0.16. These findings complement the scant literature on the environmental impact of road pricing.

• Item Type: MPRA Paper
• Language: English
• Keywords: highway toll; air pollution; visibility; regression discontinuity design; differences-in-differences
• Subjects: 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; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R41 - Transportation: Demand, Supply, and Congestion ; Travel Time ; Safety and Accidents ; Transportation Noise; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R48 - Government Pricing and Policy

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