¡Feliz Cinco de Mayo! Today we travel south of the border for an update on Mexico City’s well-known driving restrictions. What better way to celebrate Cinco de Mayo? Some people prefer margaritas, but here at the Energy Institute we like to turn up the mariachi music and analyze air pollution data. ¡Orale!
Also known as “Hoy No Circula” (HNC), Mexico City’s driving restrictions have now been in place for 25 years, and have spurred similar restrictions in Santiago, Sao Paulo, Bogota, Medellin, San Jose, Beijing, Tianjin, and Quito. The format differs across cities, but most of these programs follow Mexico City’s approach and restrict driving based on the last digit of the license plate.
The initial rationale for HNC was local air pollution. Mexico City had some of the highest ozone levels in the world in the late 1980s, and the program was a politically visible way to attempt to address the problem. Unfortunately, there is no evidence that HNC actually improved air quality (Davis, 2008, Gallego, Montero, and Salas, 2013). Drivers did not switch to the subway or bus system. Instead, they used taxis more and bought additional cars so that they could drive every day. Gasoline sales (below) increased steadily throughout the period.
Despite the lack of empirical support, HNC has remained in place. And, in the summer of 2008, the program was expanded to include Saturdays. Again, the primary rationale was air quality (details here), with the Mexico City government attempting to address Saturday air pollution levels that had increased during the 2000s to reach and often exceed typical weekday levels.
The implementation of “Hoy No Circula Sabatino” was much like the original restrictions. Vehicles with a license plate ending in “5″ or “6″, for example, cannot drive during the first Saturday each month. Certain newer vehicles are exempt, so in practice about 8% of vehicles are not allowed to drive on any given Saturday.
There is more discretionary driving on Saturdays, so one might expect these restrictions to be more effective at getting drivers to substitute to public transportation or to avoid trips altogether. One might also expect Saturday restrictions to engender substitution to Sundays, which would be welfare-improving since traffic and pollution levels tend to be lower.
I am working on a full-scale analysis of the Saturday restrictions. In the meantime, here is some preliminary graphical evidence on what happened to air quality. I constructed a dataset describing hourly pollution levels from all Saturdays during 2007, 2008, and 2009. These data come from 48 monitoring stations located throughout the city that are part of Mexico City’s RAMA network.
Air pollution in Mexico City varies widely due to weather and seasonal factors, so it is important to control for this. The figures below plot the variation in air pollution that is left after controlling flexibly for these factors. I also plot a line which follows the overall pattern. This fitted line is allowed to “jump” on July 5th, 2008, the day when the Saturday restrictions started. For clarity, I also show a vertical line on that same day.
More work needs to be done, but these preliminary results are pretty disappointing. If the program had a beneficial effect on air pollution, you would expect the fitted line to the left of July 5th, 2008 to be higher than the fitted line to the right. But across pollutants, there is no evidence of a decrease in pollution when the Saturday restrictions began. If anything, several of the figures actually show a small increase in pollution.
If these results hold up, they will raise further questions about the effectiveness of programs like this. Driving restrictions may seem like a reasonable approach for addressing the difficult problem of urban air pollution. However, the effectiveness of any indirect policy like this depends on the available substitutes.
Drivers everywhere have a revealed preference for fast and convenient transportation and will look for ways to circumvent rationing programs of this form. Depending on the emissions characteristics of available alternatives, these changes in behavior can seriously undermine the potential benefits.