Pigovian Transport Pricing in Practice

Beat Hintermann, Beaumont Schoemann, Joseph Molloy, Thomas Götschi, Alberto Castro, Christopher Tchervenkov, Uros Tomic and Kay W. Axhausen

No 11871, CESifo Working Paper Series from CESifo

Abstract: We implement Pigovian transport pricing in a field experiment in urban agglomerations of Switzerland over the course of 8 weeks. Our pricing considers the external costs from climate damages, health outcomes from pollution, accidents and physical activity, and congestion. It varies across time, space and mode of transport and is deducted from a budget provided to GPS-tracked participants. The treatment reduces the external costs of transport by 4.6% during the course of the experiment. The main underlying mechanism is a shift away from driving towards other modes, such as public transport, walking and cycling. Providing information about the external costs of transport alone is insufficient to change the transport behavior for the sample majority. We compute the welfare improvement due to mode shift to be 77 Swiss francs (or US dollars) per person and year, and that a fuel tax would achieve 70% of this gain.

Keywords: transport pricing; Pigovian taxation; mobility; transportation; external costs; congestion; GPS-tracking (search for similar items in EconPapers)
JEL-codes: H23 H31 I18 Q52 Q54 R41 R48 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11871

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