Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296127 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11038
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We provide a framework for setting congestion charges that reflect emission and congestion externalities and policy responses, such as vehicle ownership, driving, and residential sorting. Using Swedish administrative microdata, we identify these responses by exploiting a temporary exemption for alternative fuel vehicles and variation in individuals' exposure to congestion charges. We find that commuters respond by adopting exempted alternative fuel vehicles, shifting trips away from fossil fuel toward alternative fuel vehicles, and changing where they live and work. We combine the estimated responses with the framework to recover an optimal congestion charge of €9.46 per crossing in Stockholm.
Document Type: 
Working Paper
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