The impact of tradable rush hour permits on peak demand: evidence from an on-campus field experiment

Abstract

Tradable permits have received growing attention as a new travel demand management intervention to manage rush-hour travel behavior and related negative social, economic, and environmental impacts. This study provides the first real-life evidence of tradable permits’ ability to manage actual scheduling decisions in a congested morning peak. By conducting a 2-week field experiment with 91 students in Beijing, we investigate the effectiveness of the tradable permit scheme in terms of reducing “rush-hour” breakfasts, as well as the trading behavior of participants. The results of nested logit models show that the tradable permit scheme significantly reduces rush-hour breakfasts by about 20%. These results are robust to controlling for other factors, such as individual, commuting, attitudes, game- and market-related characteristics. Our results further suggest that participants are not perfectly rational when responding to the tradable permit scheme. This study informs policymakers regarding the design and implementation of a tradable rush hour permit scheme.