Pigovian Transport Pricing in Practice

March 1, 2024

Thank you to Beat Hintermann, Professor of Business and Economics at University of Basel, who presented Pigovian Transport Pricing in Practice at the Transportation Seminar Mar. 1, 2024.  Thank you to our co-sponsor, the Department of Agricultural and Resource Economics.

Abstract: Pigovian transport pricing is implemented in a large-scale field experiment in urban agglomerations of Switzerland. The pricing varies across time, space and mode of transport. One third of the participants is given a financial incentive to reduce their external costs of transport, whereas others are provided information only or serve as a control group. The pricing treatment causes a significant reduction in the external costs of transport. This reduction is a consequence of mode substitution and a shift in departure times. The effect of providing information in the absence of pricing is also statistically significant, implying that information and pricing each play an important role in explaining the total effect.

Bio: Professor Hintermann is a Professor of Economics at the University of Basel. He is member of the Research Network Sustainable Future, a member of the environmental and resource economics chapter of the German Economics Association (AURÖ) and the CESifo Research Network, and from 2015 to 2020 part of the Swiss Competence Center for Research in Energy, Society and Transition (CREST). His research revolves around such externalities as arise when decentralized markets fail, for example in the context of environmental pollution or congestion, and call for an intervention by the public sector, with a particular focus on the functioning of cap-and-trade markets for emissions, their interaction with electricity and fuel markets, and on transport pricing. He is interested in questions related to fiscal federalism, behavioral public economics and health economics.