The Effect of Beijing’s Driving Restrictions on Pollution and Economic Activity
V. Brian Viard
Cheung Kong Graduate School of Business
Southwestern University of Finance and Economics - Research Institute of Economics and Management
November 18, 2014
We evaluate the pollution and labor supply reductions from Beijing’s driving restrictions. Causal effects are identified from both time-series and spatial variation in air quality and intra-day variation in television viewership. Based on daily data from multiple monitoring stations, air pollution falls 22% during every-other-day and 15% during one-day-per-week restrictions. Based on hourly television viewership data, viewership during the restrictions increases by 9 to 17% for workers with discretionary work time but is unaffected for workers without, consistent with the restrictions’ higher per-day commute costs reducing daily labor supply. We provide possible reasons for the policy’s success, including evidence of high compliance based on parking garage entrance records.
Number of Pages in PDF File: 65
Keywords: driving restrictions, externalities, environmental economics, air pollution, commute costs
JEL Classification: H23, D62, L51, J22, R41
Date posted: August 27, 2011 ; Last revised: December 3, 2014
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