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.
Common Resources — Jan 14, 2016
Delhi’s Odd-Even Driving Policy: There Has Got to Be a Better Way
Why are economists, like lawyers and proctologists, universally loved and admired? One reason is our penchant for highlighting the perverse uninten...
Resources Magazine — Sep 24, 2015
How Costly Are Driving Restrictions Programs? Evidence from Mexico City
A novel approach to calculating the costs of Mexico City’s “Day Without Driving” program estimates that roughly 3 percent of the country’s GDP is s...
Explainer — Oct 21, 2021
Value of Science 109: The VALUABLES Impact Assessment Framework, Step 3: Identifying How Decisions Influence Outcomes for People and the Environment
In the third step of the VALUABLES Impact Assessment Framework, we explore the impact of decisionmaking processes on people and the environment.