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.
Highlights
Traffic congestion is among the top issues in many cities in the world
Our results show that public support depends closely on the design as well as the information provided, in particular with respect to the environmental benefits of a congestion charge
This paper builds on the theoretical literature, and draws lessons from the existing congestion charge schemes in the world, to put forward a set of plausible designs for a Geneva congestion charge
Summary
Traffic congestion is among the top issues in many cities in the world. Congestion generates important costs to society, due to extended journeys, local and global pollution, noise, and accidents. Time lost in traffic is the main externality from traffic congestion (Small et al 2005, Table 3.3; Small et al 2007), followed by car accidents and pollution among others (e.g. Li et al 2012; Jacobsen 2013). The solution to the external costs of driving is well known since the 1960s: pricing road traffic (Walters 1961; Reynolds 1963; Vickrey 1963). Pigouvian pricing should be introduced to make drivers pay for the (high) marginal cost of their use of street space. Vickrey’s analysis pointed to large welfare gains from road pricing, derived in particular by the change in traffic during peak hours, when the extra cost of an additional car is the highest, as the infrastructure capacity is pushed to the limit and the speed of other drivers is affected. Simeonova et al (2018) find an immediate reduction in asthma among young children after the Stockholm congestion charge was initially trialed, but a much larger effect once it became permanent, pointing to the non-linear effects of exposure to pollution on health
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