The Distributional Effects of Low Emission Zones: Who Benefits from Cleaner Air?

Björn Bos, Moritz A. Drupp and Lutz Sager

No 11739, CESifo Working Paper Series from CESifo

Abstract: Low emission zones (LEZ) represent a key environmental policy instrument to address air pollution in cities. LEZs have reduced air pollution and associated health damages in regulated areas, but it remains unclear who has benefited from cleaner air. To examine the distributional effects of LEZs, we combine gridded data on resident characteristics, including income and a proxy for ethnicity, with high-resolution estimates of fine particle (PM2.5) concentrations in Germany, the country with the highest number of LEZs. We estimate heterogeneous treatment effects with a difference-in-differences approach and show that PM2.5 pollution reductions are distributed unequally across society. While residents with German name origins experience larger improvements within LEZs, residents with foreign names disproportionately live in LEZs and thus benefit more when assessed at a nationwide scale. Monetizing air quality benefits following governmental guidance, we find that they are distributed pro-poor within LEZs, disproportionately benefiting lower-income residents. From a nationwide perspective, benefits are distributed almost proportionally although the sign is sensitive to how benefits from cleaner air scale with income. Overall, our results suggest that LEZs have nuanced distributional implications that differ sharply between a national perspective and local assessments that focus on effects within LEZs.

Keywords: air pollution; distributional effects; low emission zones; traffic regulation (search for similar items in EconPapers)
JEL-codes: J15 Q52 Q53 Q58 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp11739.pdf (application/pdf)

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:ces:ceswps:_11739

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().