Adopting a cleaner technology: The effect of driving restrictions on fleet turnover

Abstract

In an effort to reduce vehicle pollution and congestion and persuade drivers to give up their cars in favor of public transport, authorities in different cities have experimented with different forms of driving restrictions. The restrictions in Mexico-City and in Santiago, for example, ban the use of a car once a week based on the last digit of its license plate, unless the car is sufficiently new, in which case is exempt. Evidence from Santiago's driving restriction show that this exemption has a large effect on fleet turnover towards cleaner cars. We also develop a model to study how best to design these driving policies. With Hernán Barahona, Francisco Gallego.