Beat Hintermann, University of Basel

We implement Pigovian transport pricing in a large-scale field experiment in urban agglomerations of Switzerland over the course of 8 weeks. The pricing considers external costs from climate damages, health outcomes and congestion and varies across time, space and mode of transport. We find that Pigovian pricing causes a significant reduction in the external costs of transport. The main underlying mechanism is a shift away from driving towards other modes, but we also find evidence for a shift in departure times. Furthermore, providing information about external costs alone changes behavior of altruists, but not for the whole sample. Our results show that Pigovian transport pricing is feasible and that it improves welfare by CHF 50 per person and year in the short run.

Ashwin Rode, UChicago

Michael Greenstone, UChicago

Michael Greenstone and Thom Covert, UChicago

Frank Wolak, Stanford University

Robert Rosner, UChicago

Ali Hortaçsu, UChicago

Amir Jina, UChicago

Ruixue Jia, UC San Diego

Jim Sallee, UChicago