Abstract

http://ssrn.com/abstract=1917110
 
 

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The Effect of Beijing’s Driving Restrictions on Pollution and Economic Activity


V. Brian Viard


Cheung Kong Graduate School of Business

Shihe Fu


Southwestern University of Finance and Economics - Research Institute of Economics and Management

September 25, 2013


Abstract:     
We evaluate the environmental benefit and economic cost of Beijing’s driving restrictions. Based on daily data from multiple monitoring stations, air pollution falls 20% during every-other-day and 9% during one-day-per-week restrictions. Based on hourly television viewership data, viewership during the restrictions increases by 8.7 to 12.8% 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. Causal effects are identified from both time-series and spatial variation in air quality and intra-day variation in viewership. 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

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Date posted: August 27, 2011 ; Last revised: October 8, 2013

Suggested Citation

Viard, V. Brian and Fu, Shihe, The Effect of Beijing’s Driving Restrictions on Pollution and Economic Activity (September 25, 2013). Available at SSRN: http://ssrn.com/abstract=1917110 or http://dx.doi.org/10.2139/ssrn.1917110

Contact Information

V. Brian Viard (Contact Author)
Cheung Kong Graduate School of Business ( email )
Oriental Plaza, Tower E3
One East Chang An Avenue
Beijing, 100738
China
86-10-8518-8858 (Phone)
86-10-8518-6800 (Fax)
HOME PAGE: http://english.ckgsb.edu.cn/faculty_content/brian-viard
Shihe Fu
Southwestern University of Finance and Economics - Research Institute of Economics and Management ( email )
Chengdu, 610074, Sichuan 610074
China
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