A Contingent Valuation Approach to Estimating Regulatory Costs: Mexico's Day Without Driving Program

Resources for the Future Discussion Paper 15-21

34 Pages Posted: 16 Jun 2015

See all articles by Allen Blackman

Allen Blackman

Inter-American Development Bank (IDB)

Francisco Alpizar

Tropical Agricultural and Higher Education Center

Fredrik Carlsson

Goeteborg University - School of Economics & Commercial Law

Marisol Rivera-Planter

National Institute of Ecology

Date Written: May 28, 2015

Abstract

Little is known about the cost of environmental regulations such as residential zoning restrictions and recycling mandates that target households instead of firms, partly because of significant methodological and data challenges. We use a survey-based approach, the contingent valuation method, to measure the costs of Mexico City’s Day Without Driving program, which seeks to stem pollution and traffic congestion by prohibiting vehicles from being driven one day each week. To our knowledge, ours is the first study of an actual regulation to use this approach. We find that the Mexican program’s costs are substantial: up to US $103 per vehicle per year, about 1 percent of drivers’ annual income. Recent research has questioned whether programs for driving restrictions in Mexico City and several other megacities actually have environmental benefits. Our results suggest that whatever benefits these programs may have, they can be quite costly.

Keywords: contingent valuation, driving restrictions, regulatory cost

JEL Classification: Q52, R48, O18

Suggested Citation

Blackman, Allen and Alpizar, Francisco and Carlsson, Fredrik and Rivera-Planter, Marisol, A Contingent Valuation Approach to Estimating Regulatory Costs: Mexico's Day Without Driving Program (May 28, 2015). Resources for the Future Discussion Paper 15-21. Available at SSRN: https://ssrn.com/abstract=2618507 or http://dx.doi.org/10.2139/ssrn.2618507

Allen Blackman (Contact Author)

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Francisco Alpizar

Tropical Agricultural and Higher Education Center ( email )

Turrialba
Costa Rica

Fredrik Carlsson

Goeteborg University - School of Economics & Commercial Law ( email )

Box 640
SE 405 30 Goeteborg
Sweden
+46 31-773 4174 (Phone)
+46 31-773 1043 (Fax)

Marisol Rivera-Planter

National Institute of Ecology ( email )

Periferico Sur 5000-tercer piso
Col Insurgentes Cuicuilco
Mexico, Mexico City 04530
Mexico
525554246412 (Phone)
525554245408 (Fax)

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