The effects of license plate-based driving restrictions on air quality: Theory and empirical evidence

Abstract

A typical driving restriction prohibits drivers from using their vehicles on given weekdays, based on the last digits of their vehicles’ license plates. A number of cities in developing countries have used license plate-based driving restrictions as a policy for reducing urban air pollution and traffic congestion. This paper develops a theoretical model of the effects of license plate-based driving restrictions on air quality that combines an economic model with information about the sources and atmospheric chemistry of different air pollutants. We then draw upon suggestive empirical evidence from license plate-based driving restrictions implemented in Bogotá, Colombia. Consistent with our theory model, we find suggestive empirical evidence that under certain circumstances, due to substitution, the purchase of a second car, the use of alternative modes of transportation, and/or atmospheric chemistry, it is possible for license plate-based driving restrictions to increase air pollution. Also consistent with our theory, we find that license plate-based driving restrictions may have different effects on different air pollutants, reflecting heterogeneity in the sources and atmospheric chemistry of the pollutants. In particular, owing to atmospheric chemistry, it is possible for a license plate-based driving restriction to cause a significant decrease in NO and a significant increase in NO2, NOx, and O3.