Congestion pricing with electric vehicle exemptions: Car-ownership effects and other behavioral adjustments

Abstract

Decarbonizing transportation requires a shift from conventional to zero-emission vehicles. We examine whether congestion pricing with electric vehicle (EV) exemptions accelerates this transition by encouraging a shift toward cleaner cars. To identify causal effects, we combine administrative data on car ownership with a triple-differences design that exploits household-level variation in policy exposure across metropolitan areas and work commutes. We find that higher rush hour charges for conventional vehicles significantly increase EV adoption, primarily through replacement rather than fleet expansion. However, responses vary by socioeconomic characteristics, with higher-income and well-educated households more likely to adopt EVs. Beyond car ownership, we document behavioral adjustments, including relocation to avoid tolls, re-routing around the cordon, and shifting travel timing. Overall, congestion pricing reduced traffic volumes and improved air quality. Our findings offer insights for designing equitable and effective transportation policies.