Press Release

New Paper Examines Vehicle Ownership Restriction Program in Beijing

May 20, 2016

WASHINGTON—The rise in vehicle use in developing countries has exacerbated problems of congestion, pollution, and greenhouse gas emissions. Petroleum consumption in less-developed countries is expected to grow 60 percent between 2010 and 2030, while consumption in more-developed countries over the same period is expected to decline slightly. In response, many cities in developing countries—including Singapore, Beijing, Shanghai, and Mexico City—have tried or considered various ways to restrict vehicle ownership and use.

Some prior work suggests that not having a car increases the cost of commuting and limits the set of job opportunities, but no empirical evidence exists on the efficacy and costs of these efforts. Now, a paper posted today by Resources for the Future (RFF), The Effect of Owning a Car on Travel Behavior: Evidence from the Beijing License Plate Lottery, takes a closer look at the program in Beijing, where, since January 2011, any resident who wishes to purchase a car must first win a drawing for license plates.

The authors are able to assess the Beijing program by exploiting variations in household vehicle ownership induced by the lottery system, combined with highly detailed information available on vehicle use. They find that adding a car has little impact on total distance traveled or time spent traveling, but a large impact on mode of travel. They conclude that while the program has reduced car ownership by 20 percent and car travel distance by 10 percent, the policy has not added significantly to overall distances traveled or commute times. “This suggests,” they note, “that labor market consequences of restricting ownership may be modest.”

The authors are Jun Yang, Beijing Transportation Research Center; Antung A. Liu, Indiana University; Ping Qin, Renmin University of China; and Joshua Linn, Senior Fellow, RFF.

Read the full paper:

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Resources for the Future (RFF) is an independent, nonpartisan organization based in Washington, DC, that conducts rigorous economic research and analysis to improve environmental and natural resource policy.