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The Effects of Transport Policies on Car Use: Theory and Evidence for Latin American Countries

The Effects of Transport Policies on Car Use: Theory and Evidence for Latin American Countries
By Francisco Gallego, Juan-Pablo Motero and Christian Salas

Presented by Christian Salas


Jon Strand, DECEE

Wednesday, October 31, 2012

Time: 12:30-2:00 pm

Venue: MC6-598


In an effort to reduce air pollution and congestion, Latin American cities have experimented with different policies to persuade drivers to give up their cars in favor of public transport. This paper looks at two of such policies: the driving restriction program introduced in Mexico City in November of 1989 –Hoy-No-Circula (HNC)–; and the public transport reform carried out in Santiago in February of 2007–Transantiago (TS). Based on hourly concentration records of carbon monoxide, which comes primarily from vehicles exhaust, we find that household responses to both HNC and TS have been ultimately unfortunate –more cars on the road and higher pollution levels– but also remarkably similar in how fast households have adjusted their stock of vehicles, within a year. We document how different short- and long-run effects of the policies can be. We also find significant heterogeneity of the effects of the policy across the city. A novel theoretical model is also developed to explain the empirical results and to compute policy costs based on few observables.

Bio,  Christian Salas:

Christian Salas is a consultant at the Finance and Private Sector Development unit in the Development Economics Research Group of The World Bank. His research focus is on political economy, energy economics and development economics.

For further information on the presentation, contact Jon Strand at:, 202-458-5122.

The Joint Bank-Fund Brown-Bag Research Seminars on Environment and Energy is a joint initiative between the Development Research Group, Environment and Energy Team (DECEE), World Bank, and the Fiscal Affairs Department, IMF. Organizers of the series are Jon Strand (DECEE), and Ruud de Mooij and Ian Parry (FAD/IMF). The seminars are held at lunch time, normally once every two weeks, alternately in the Bank and Fund. Aims of the seminars are to raise attention to, and interest in, environment, energy and natural resources issues in both institutions; to promote the interaction between the two institutions in these fields; and to improve the institutions' common work on policy.

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