November 28, 2010

Rationing Public Goods by Cooperation or Pecuniary Incentives: Evidence from the Spare-the-Air Program

by Steven E. Sexton

- This paper examines the extent to which free transit fares and appeals for car trip avoidance reduce car pollution on smoggy days. Using data on freeway traffic volumes and transit ridership, public appeals for cooperation are shown to reduce car trips. The marginal effect of free transit fares, however, is to increase car trips. Public appeals are shown to increase carpooling but not transit ridership. Free fares increase transit ridership but not carpooling.

Sexton, S.E. (2010). "Rationing Public Goods by Cooperation or Pecuniary Incentives: Evidence from the Spare-the-Air Program." Department of Agricultural and Resource Economics, UC Berkeley, CUDARE Working Paper No. 1107, Jul 2010.