Distributional Impacts of Congestion Pricing in New York City

Yikuan Ji

No 360946, 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO from Agricultural and Applied Economics Association

Abstract: This paper examines the distributional and behavioral impacts of New York City’s congestion pricing policy, launched in January 2025 as the first cordon-based system in the United States. Using detailed trip-level data from the NYC Citywide Mobility Survey and a structure discrete choice model of travel mode choice, I estimate heterogeneous responses to price and service changes across demographic and geographic groups. Empirical results confirm strong disutility for both travel cost and time, with limited substitution between private vehicles and public transit. Counterfactual simulations show that the current toll design alone has minimal effect on reducing vehicle use. However, reinvesting toll revenue into transit—via fare reductions and service improvements—increases subway use, stabilizes bus share, and modestly shifts travelers away from cars. These effects are more pronounced for longer trips and for travel involving Manhattan’s core. In contrast, raising tolls without reinvestment delivers negligible additional impact. These results highlight the need to pair pricing with targeted transit investment to achieve both efficiency and equity goals. Future work will quantify welfare impacts across demographic and geographic subgroups to inform inclusive urban transportation policy.

Keywords: Farm; Management (search for similar items in EconPapers)
Pages: 57
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea25:360946

DOI: 10.22004/ag.econ.360946

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