Working Paper

Who Will Be Affected by a Congestion Pricing Scheme in Beijing?

Mar 4, 2015 | Joshua Linn, Zhongmin Wang, Lunyu Xie

Abstract

Equity concerns have been an important obstacle to adopting congestion pricing, both in developed and developing countries. However, the existing evidence on the equity effects of congestion pricing has come from developed countries. In this paper, we shed light on the distributional consequences of a congestion pricing scheme currently under consideration in Beijing. We find that under the congestion pricing scheme, which covers the areas within the city’s 3rd Ring Road, a very small proportion of Beijing commuters will have to pay the full congestion charge. More important, these directly affected commuters typically have higher household incomes and are wealthier than individuals who are not directly affected by the congestion pricing scheme. Our finding reflects the fact that individuals who drive to work in Beijing are relatively wealthy.