Heterogeneity in the reaction of traffic flows to road pricing: a synthetic control approach applied to Milan

Abstract

Local governments are increasingly adopting road pricing schemes to curb pollution and congestion in the cities. Despite its popularity, few empirical studies have made an attempt to estimate the effectiveness of such interventions. The aim of this paper is to assess the impact of road pricing on traffic flows by means of a synthetic control approach which allows for a wide heterogeneity of treatment effects. By using a large sample of 75 types of vehicles entering the centre of Milan between 2008 and 2012, we evaluate the enforcement of the road pricing scheme occurred in January 2012 across 20 types of vehicles. We have found a large variation in the reaction of traffic flows and a significant effect in terms of vehicles reduction after pricing for cars and for some types of commercial vehicles. Interestingly and surprisingly, no effect is detected for vehicles whose access in the city centre was forbidden.