Scandinavian Working Papers in Business Administration

Working Papers,
Örebro University, School of Business

No 2009:16: GREEN CARS STERILIZE CONGESTION CHARGES: A MODEL ANALYSIS OF THE REDUCED IMPACT OF STOCKHOLM ROAD TOLLS

Lars Hultkrantz () and Xing Liu ()
Additional contact information
Lars Hultkrantz: Department of Business, Economics, Statistics and Informatics, Postal: Örebro University, Swedish Business School, SE - 701 82 ÖREBRO, Sweden
Xing Liu: Department of Business, Economics, Statistics and Informatics, Postal: Örebro University, Swedish Business School, SE - 701 82 ÖREBRO, Sweden

Abstract: Beforeafter comparisons indicate that the impact of the road toll in Stockholm on traffic volumes was smaller when the system was reopened in 2007, compared to the effect during the trial in 2006. We calibrate a modalchoice model on data for Stockholm from before and during the trial and use it to simulate the effects of some seemingly subtle changes of the design of the congestioncharge scheme. We find that the growth of the share of exempted ”green” cars and the decision to make charges deductible from the income tax may have considerably reduced the positive welfare effect of the toll.

Keywords: congestion pricing; equity effects; modal choice

JEL-codes: H23; H54; R48

40 pages, November 17, 2009

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