The effect of China's driving restrictions on air pollution: The role of a policy announcement without a stated expiration

Wenbo Li

Resource and Energy Economics, 2023, vol. 72, issue C

Abstract: Driving restrictions keep cars off the street largely on the basis of the last digit of the license plate number. This paper evaluates how different driving restriction policies affected the air quality of the 17 cities in Henan, one of China’s most populous provinces, from 2017 to 2019. I offer a novel way to categorize driving restrictions by making a distinction between cities that announced driving restrictions without a stated expiration and other cities that announced driving restrictions with a stated expiration. I provide some suggestive evidence on the exogeneity of timing, and using two-way fixed effects, I find significant heterogeneity in policy effectiveness. The policy reduced particulate matter concentration in cities that announced driving restrictions without a stated expiration, but had no effect in cities that announced driving restrictions with a stated expiration. To explain this difference, I build a model, which implies that driving restrictions announced without a stated expiration can induce people to pay a high fixed cost in exchange for a low transit time and not to choose non-compliance, two behavioral changes with the potential to further reduce air pollution. Thus, managing the duration of a policy and people’s expectations of its duration can matter crucially for the policy’s effectiveness.

Keywords: Driving restrictions; Road space rationing; Air pollution; China (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0928765523000155
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:72:y:2023:i:c:s0928765523000155

DOI: 10.1016/j.reseneeco.2023.101360

Access Statistics for this article

Resource and Energy Economics is currently edited by J. F. Shogren and S. Smulders

More articles in Resource and Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().