1932
0
  1. Home
  2. A-Z Publications
  3. Annual Review of Resource Economics
  4. Volume 12, 2020
  5. Article

Annual Review of Resource Economics

Volume 12, 2020

Transportation and the Environment in Developing Countries

Abstract

In urban areas around the world, increasing motorization and growing travel demand make the urban transportation sector an ever-greater contributor to local air pollution and greenhouse gas emissions. The situation is particularly acute in developing countries, where growing metropolitan regions suffer some of the world's highest levels of air pollution. Policies that seek to develop and manage this transportation sector—both to meet rising demand linked to economic growth and to safeguard the environment and human health—have had strikingly different results, with some inadvertently exacerbating the traffic and pollution they seek to mitigate. This review summarizes findings in the recent literature on the impacts of a host of urban transportation policies used in both developed- and developing-country settings. The article identifies research challenges and future areas of study regarding transportation policies, which can have important, long-lasting impacts on urban life and global climate change.

Keyword(s): air pollution, environment, JEL H23, JEL Q40, JEL Q58, JEL R40, policy instruments, transportation
Loading

Article metrics loading...

/content/journals/10.1146/annurev-resource-103119-104510
2020-10-06
2024-04-24
Loading full text...

Full text loading...

/deliver/fulltext/resource/12/1/annurev-resource-103119-104510.html?itemId=/content/journals/10.1146/annurev-resource-103119-104510&mimeType=html&fmt=ahah

Literature Cited

  1. Allcott H. 2013. The welfare effects of misperceived product costs: data and calibrations from the automobile market. Am. Econ. J. Econ. Policy 5:330–66
     [Google Scholar]
  2. Allcott H, Knittel C. 2019. Are consumers poorly informed about fuel economy? Evidence from two experiments. Am. Econ. J. Econ. Policy 11:11–37
     [Google Scholar]
  3. Allcott H, Knittel C, Taubinsky D 2015. Tagging and targeting of energy efficiency subsidies. Am. Econ. Rev. 105:5187–91
     [Google Scholar]
  4. Allcott H, Wozny N. 2014. Gasoline prices, fuel economy, and the energy paradox. Rev. Econ. Stat. 96:5779–95
     [Google Scholar]
  5. Anas A, Lindsey R. 2011. Reducing urban road transportation externalities: road pricing in theory and in practice. Rev. Environ. Econ. Policy 5:166–88
     [Google Scholar]
  6. Anas A, Timilsina GR. 2009. Lock-in effects of road expansion on CO2 emissions: results from a core-periphery model of Beijing Policy Res. Work. Pap., World Bank Washington, DC:
  7. Anderson ML. 2014. Subways, strikes, and slowdowns: the impacts of public transit on traffic congestion. Am. Econ. Rev. 104:92763–96
     [Google Scholar]
  8. Anderson ST, Sallee JM. 2016. Designing policies to make cars greener. Annu. Rev. Resour. Econ. 8:157–80
     [Google Scholar]
  9. Auffhammer M, Kellogg R. 2011. Clearing the air? The effects of gasoline content regulation on air quality. Am. Econ. Rev. 101:62687–722
     [Google Scholar]
  10. Austin D, Dinan T. 2005. Clearing the air: the costs and consequences of higher CAFE standards and increased gasoline taxes. J. Environ. Econ. Manag. 50:3562–82
     [Google Scholar]
  11. Barreca A, Clay K, Deschenes O, Greenstone M, Shapiro JS 2016. Adapting to climate change: the remarkable decline in the US temperature-mortality relationship over the twentieth century. J. Political Econ. 124:1105–59
     [Google Scholar]
  12. Barwick PJ, Li S, Rao D, Zahur NB 2019. The morbidity cost of air pollution: evidence from consumer spending in China Work. Pap., Cornell Univ Ithaca, NY:
  13. Bauernschuster S, Hener T, Rainer H 2017. When labor disputes bring cities to a standstill: the impact of public transit strikes on traffic, accidents, air pollution, and health. Am. Econ. J. Econ. Policy 9:11–37
     [Google Scholar]
  14. Baum-Snow N. 2007. Did highways cause suburbanization?. Q. J. Econ. 122:2775–805
     [Google Scholar]
  15. Beaudoin J, Lin-Lawell C-YC. 2017. Is public transit's ‘green’ reputation deserved? Evaluating the effects of transit supply on air quality Work. Pap., Univ. Wash Tacoma:
  16. Beevers SD, Carslaw DC. 2005. The impact of congestion charging on vehicle emissions in London. Atmos. Environ. 39:11–5
     [Google Scholar]
  17. Bel G, Holst M. 2018. Evaluation of the impact of bus rapid transit on air pollution. Transp. Policy 63:209–20
     [Google Scholar]
  18. Beresteanu A, Li S. 2011. Gasoline prices, government support, and the demand for hybrid vehicles in the United States: hybrid vehicle demand. Int. Econ. Rev. 52:1161–82
     [Google Scholar]
  19. Bigazzi AY, Figliozzi MA. 2013. Marginal costs of freeway traffic congestion with on-road pollution exposure externality. Transp. Res. Policy Pract. 57:12–24
     [Google Scholar]
  20. Black DA, Kolesnikova N, Taylor LJ 2014. Why do so few women work in New York (and so many in Minneapolis)? Labor supply of married women across US cities. J. Urban Econ. 79:59–71
     [Google Scholar]
  21. Burke M, Emerick K. 2016. Adaptation to climate change: evidence from US agriculture. Am. Econ. J. Econ. Policy 8:3106–40
     [Google Scholar]
  22. Busse MR, Knittel CR, Zettelmeyer F 2013. Are consumers myopic? Evidence from new and used car purchases. Am. Econ. Rev. 103:1220–56
     [Google Scholar]
  23. Carter C. 2019. The war on smog. SmartCitiesWorld March 7. https://www.smartcitiesworld.net/special-reports/the-war-on-smog-
    [Google Scholar]
  24. Chandra A, Gulati S, Kandlikar M 2010. Green drivers or free riders? An analysis of tax rebates for hybrid vehicles. J. Environ. Econ. Manag. 60:278–93
     [Google Scholar]
  25. Chay KY, Greenstone M. 2003. The impact of air pollution on infant mortality: evidence from geographic variation in pollution shocks induced by a recession. Q. J. Econ. 118:1121–67
     [Google Scholar]
  26. Chen X, Zhao J. 2013. Bidding to drive: car license auction policy in Shanghai and its public acceptance. Transp. Policy 27:39–52
     [Google Scholar]
  27. Chen Y, Jin GZ, Kumar N, Shi G 2013. The promise of Beijing: evaluating the impact of the 2008 Olympic Games on air quality. J. Environ. Econ. Manag. 66:3424–43
     [Google Scholar]
  28. Chen Y, Whalley A. 2012. Green infrastructure: the effects of urban rail transit on air quality. Am. Econ. J. Econ. Policy 4:158–97
     [Google Scholar]
  29. Chin A, Smith P. 1997. Automobile ownership and government policy: the economics of Singapore's vehicle quota scheme. Transp. Res. Policy Pract. 31:2129–40
     [Google Scholar]
  30. Chugh R, Cropper M, Narain U 2011. The cost of fuel economy in the Indian passenger vehicle market. Energy Policy 39:117174–83
     [Google Scholar]
  31. Cohen P, Hahn R, Hall J, Levitt S, Metcalfe R 2016. Using big data to estimate consumer surplus: the case of Uber NBER Work. Pap w22627
  32. Currie J, Neidell M. 2005. Air pollution and infant health: What can we learn from California's recent experience?. Q. J. Econ. 120:31003–30
     [Google Scholar]
  33. Currie J, Walker R. 2011. Traffic congestion and infant health: evidence from E-ZPass. Am. Econ. J. Appl. Econ. 3:165–90
     [Google Scholar]
  34. Daniel JI, Bekka K. 2000. The environmental impact of highway congestion pricing. J. Urban Econ. 47:2180–215
     [Google Scholar]
  35. da Silva CBP, Saldiva PHN, Amato-Lourenço LF, Rodrigues-Silva F, Miraglia SGEK 2012. Evaluation of the air quality benefits of the subway system in São Paulo, Brazil. J. Environ. Manag. 101:191–96
     [Google Scholar]
  36. Davis LW. 2008. The effect of driving restrictions on air quality in Mexico City. J. Political Econ. 116:138–81
     [Google Scholar]
  37. Davis LW. 2019. How much are electric vehicles driven?. Appl. Econ. Lett. 26:181497–1502
     [Google Scholar]
  38. Dell M, Jones BF, Olken BA 2012. Temperature shocks and economic growth: evidence from the last half century. Am. Econ. J. Macroecon. 4:366–95
     [Google Scholar]
  39. Deryugina T, Heutel G, Miller N, Molitor D, Reif J 2019. The mortality and medical costs of air pollution: evidence from changes in wind direction NBER Work. Pap w22796
  40. Deschênes O, Greenstone M. 2007. The economic impacts of climate change: evidence from agricultural output and random fluctuations in weather. Am. Econ. Rev. 97:1354–85
     [Google Scholar]
  41. Deschênes O, Greenstone M. 2011. Climate change, mortality, and adaptation: evidence from annual fluctuations in weather in the US. Am. Econ. J. Appl. Econ. 3:4152–85
     [Google Scholar]
  42. Deschênes O, Greenstone M, Shapiro JS 2017. Defensive investments and the demand for air quality: evidence from the NOx budget program. Am. Econ. Rev. 107:102958–89
     [Google Scholar]
  43. Deschênes O, Moretti E. 2009. Extreme weather events, mortality, and migration. Rev. Econ. Stat. 91:659–81
     [Google Scholar]
  44. DeShazo JR. 2016. Improving incentives for clean vehicle purchases in the United States: challenges and opportunities. Rev. Environ. Econ. Policy 10:1149–65
     [Google Scholar]
  45. Dimitropoulos A, van Ommeren JN, Koster P, Rietveld P 2016. Not fully charged: welfare effects of tax incentives for employer-provided electric cars. J. Environ. Econ. Manag. 78:1–19
     [Google Scholar]
  46. Duranton G, Turner MA. 2011. The fundamental law of road congestion: evidence from US cities. Am. Econ. Rev. 101:62616–52
     [Google Scholar]
  47. Duranton G, Turner MA. 2012. Urban growth and transportation. Rev. Econ. Stud. 79:41407–40
     [Google Scholar]
  48. Epple D, Sieg H. 1999. Estimating equilibrium models of local jurisdictions. J. Political Econ. 107:4645–81
     [Google Scholar]
  49. Faber B. 2014. Trade integration, market size, and industrialization: evidence from China's National Trunk Highway System. Rev. Econ. Stud. 81:31046–70
     [Google Scholar]
  50. Fu S, Gu Y. 2017. Highway toll and air pollution: evidence from Chinese cities. J. Environ. Econ. Manag. 83:32–49
     [Google Scholar]
  51. Gendron-Carrier N, Gonzalez-Navarro M, Polloni S, Turner M 2018. Subways and urban air pollution NBER Work. Pap w24183
  52. Gibson M, Carnovale M. 2015. The effects of road pricing on driver behavior and air pollution. J. Urban Econ. 89:62–73
     [Google Scholar]
  53. Goel D, Gupta S. 2017. The effect of metro expansions on air pollution in Delhi. World Bank Econ. Rev. 31:1271–94
     [Google Scholar]
  54. Goldberg PK. 1998. The effects of the corporate average fuel efficiency standards in the US. J. Ind. Econ. 46:11–33
     [Google Scholar]
  55. Greene D. 2010. How consumers value fuel economy: a literature review Tech. Rep. EPA-420-R-10-008, Environ. Prot. Agency Washington, DC: https://nepis.epa.gov/Exe/ZyPDF.cgi/P1006V0O.PDF?Dockey=P1006V0O.PDF
  56. Grigolon L, Reynaert M, Verboven F 2018. Consumer valuation of fuel costs and tax policy: evidence from the European car market. Am. Econ. J. Econ. Policy 10:3193–225
     [Google Scholar]
  57. Hahn R, Metcalfe R. 2017. The ridesharing revolution: economic survey and synthesis Work. Pap., Brookings Inst Washington, DC:
  58. Hall JD, Palsson C, Price J 2018. Is Uber a substitute or complement for public transit. ? J. Urban Econ. 108:36–50
     [Google Scholar]
  59. Hausman C, Rapson DS. 2018. Regression discontinuity in time: considerations for empirical applications. Annu. Rev. Resour. Econ. 10:533–52
     [Google Scholar]
  60. Holland SP, Mansur ET, Muller NZ, Yates AJ 2016. Are there environmental benefits from driving electric vehicles? The importance of local factors. Am. Econ. Rev. 106:123700–29
     [Google Scholar]
  61. Hsiang SM, Meng KC, Cane MA 2011. Civil conflicts are associated with the global climate. Nature 476:7361438–41
     [Google Scholar]
  62. Huse C, Lucinda C. 2014. The market impact and the cost of environmental policy: evidence from the Swedish green car rebate. Econ. J. 124:578F393–419
     [Google Scholar]
  63. India Brand Equity Found 2020. Road infrastructure in India Rep., India Brand Equity Found New Delhi: https://www.ibef.org/industry/roads-india.aspx
  64. Ito K, Sallee JM. 2018. The economics of attribute-based regulation: theory and evidence from fuel economy standards. Rev. Econ. Stat. 100:2319–36
     [Google Scholar]
  65. Jacobsen MR. 2013. Evaluating US fuel economy standards in a model with producer and household heterogeneity. Am. Econ. J. Econ. Policy 5:2148–87
     [Google Scholar]
  66. Jacobsen MR, van Benthem AA 2015. Vehicle scrappage and gasoline policy. Am. Econ. Rev 105:31312–38
     [Google Scholar]
  67. Jia R. 2014. Weather shocks, sweet potatoes and peasant revolts in historical China. Econ. J. 124:57592–118
     [Google Scholar]
  68. Kahn ME. 2006. Green Cities: Urban Growth and the Environment Washington, DC: Brookings Inst. Press
  69. Kitagawa T, Tetenov A. 2018. Who should be treated? Empirical welfare maximization methods for treatment choice. Econometrica 86:2591–616
     [Google Scholar]
  70. Knittel CR, Miller DL, Sanders NJ 2016. Caution, drivers! Children present: traffic, pollution, and infant health. Rev. Econ. Stat. 98:2350–66
     [Google Scholar]
  71. Koh WTH. 2003. Control of vehicle ownership and market competition: theory and Singapore's experience with the vehicle quota system. Transp. Res. Policy Pract. 37:9749–70
     [Google Scholar]
  72. Kreindler GE. 2018. The welfare effect of road congestion pricing: experimental evidence and equilibrium implications Work. Pap., Dep. Econ., MIT Cambridge, MA:
  73. Kuminoff NV, Smith VK, Timmins C 2013. The new economics of equilibrium sorting and policy evaluation using housing markets. J. Econ. Lit. 51:41007–62
     [Google Scholar]
  74. Lalive R, Luechinger S, Schmutzler A 2013. Does supporting passenger railways reduce road traffic externalities? Work. Pap. 110, Dep. Econ., Univ Zurich:
  75. Larrick RP, Soll JB. 2008. The MPG illusion. Science 320:58831593–94
     [Google Scholar]
  76. LeRoy SF, Sonstelie J. 1983. Paradise lost and regained: transportation innovation, income, and residential location. J. Urban Econ. 13:167–89
     [Google Scholar]
  77. Li J. 2019. Compatibility and investment in the U.S. electric vehicle market Work. Pap., Sloan Sch. Manag., MIT Cambridge, MA:
  78. Li S. 2018. Better lucky than rich? Welfare analysis of automobile licence allocations in Beijing and Shanghai. Rev. Econ. Stud. 85:42389–428
     [Google Scholar]
  79. Li S, Linn J, Spiller E 2013. Evaluating “cash-for-clunkers”: program effects on auto sales and the environment. J. Environ. Econ. Manag. 65:2175–93
     [Google Scholar]
  80. Li S, Liu Y, Purevjav A-O, Yang L 2019. Does subway expansion improve air quality. ? J. Environ. Econ. Manag. 96:213–35
     [Google Scholar]
  81. Li S, Tong L, Xing J, Zhou Y 2017. The market for electric vehicles: indirect network effects and policy design. J. Assoc. Environ. Resour. Econ. 4:189–133
     [Google Scholar]
  82. Liu AA, Linn J, Qin P, Yang J 2018. Vehicle ownership restrictions and fertility in Beijing. J. Dev. Econ. 135:85–96
     [Google Scholar]
  83. Mendelsohn R, Nordhaus WD, Shaw D 1994. The impact of global warming on agriculture: a Ricardian analysis. Am. Econ. Rev. 84:4753–71
     [Google Scholar]
  84. Miguel E, Satyanath S, Sergenti E 2004. Economic shocks and civil conflict: an instrumental variables approach. J. Political Econ. 112:4725–53
     [Google Scholar]
  85. Mohring H. 1972. Optimization and scale economies in urban bus transportation. Am. Econ. Rev. 62:4591–604
     [Google Scholar]
  86. Moretti E, Neidell M. 2011. Pollution, health, and avoidance behavior: evidence from the ports of Los Angeles. J. Hum. Resour. 46:1154–75
     [Google Scholar]
  87. Muehlegger E, Rapson D. 2018. Subsidizing mass adoption of electric vehicles: quasi-experimental evidence from California NBER Work. Papw25359
  88. Nordhaus WD. 2006. Geography and macroeconomics: new data and new findings. PNAS 103:103510–17
     [Google Scholar]
  89. Olszewski P, Xie L. 2005. Modelling the effects of road pricing on traffic in Singapore. Transp. Res. Policy Pract. 39:755–72
     [Google Scholar]
  90. Oxford Bus. Group 2015. Mexico transport infrastructure development continues. The Report: Mexico 2015 London: Oxford Bus. Group https://oxfordbusinessgroup.com/overview/full-steam-ahead-investment-major-transport-infrastructure-upgrades-continues-despite-tighter-budget
    [Google Scholar]
  91. Parry IWH, Small KA. 2005. Does Britain or the United States have the right gasoline tax. ? Am. Econ. Rev. 95:41276–89
     [Google Scholar]
  92. Parry IWH, Walls M, Harrington W 2007. Automobile externalities and policies. J. Econ. Lit. 45:2373–99
     [Google Scholar]
  93. Redding SJ, Turner MA. 2015. Transportation costs and the spatial organization of economic activity. Handb. Urban Reg. Econ. 5:1339–98
     [Google Scholar]
  94. Rivers N, Saberian S, Schaufele B 2020. Public transit and air pollution: evidence from Canadian transit strikes. Can. J. Econ. 53:496–525
     [Google Scholar]
  95. Sallee JM, West SE, Fan W 2016. Do consumers recognize the value of fuel economy? Evidence from used car prices and gasoline price fluctuations. J. Public Econ. 135:61–73
     [Google Scholar]
  96. Salvo A. 2018. Flexible fuel vehicles, less flexible minded consumers: price information experiments at the pump. J. Environ. Econ. Manag. 92:194–221
     [Google Scholar]
  97. Salvo A, Huse C. 2013. Build it, but will they come? Evidence from consumer choice between gasoline and sugarcane ethanol. J. Environ. Econ. Manag. 66:2251–79
     [Google Scholar]
  98. Schlenker W, Michael Hanemann W, Fisher AC 2005. Will U.S. agriculture really benefit from global warming? Accounting for irrigation in the hedonic approach. Am. Econ. Rev. 95:1395–406
     [Google Scholar]
  99. Sieg H, Smith VK, Banzhaf HS, Walsh R 2004. Estimating the general equilibrium benefits of large changes in spatially delineated public goods. Int. Econ. Rev. 45:41047–77
     [Google Scholar]
  100. Simeonova E, Currie J, Nilsson P, Walker R 2018. Congestion pricing, air pollution and children's health NBER Work. Pap w24410
  101. Springel K. 2019. Network externality and subsidy structure in two-sided markets: evidence from electric vehicle incentives Work. Pap., Georgetown Univ Washington, DC:
     [Google Scholar]
  102. Viard VB, Fu S. 2015. The effect of Beijing's driving restrictions on pollution and economic activity. J. Public Econ. 125:98–115
     [Google Scholar]
  103. Vickrey WS. 1959. Statement on the pricing of urban street use. Hearings: U.S. Congress, Joint Committee on Metropolitan Washington D.C. Problems466–77
     [Google Scholar]
  104. Vickrey WS. 1969. Congestion theory and transport investment. Am. Econ. Rev. 59:2251–60
     [Google Scholar]
  105. Whitefoot KS, Skerlos SJ. 2012. Design incentives to increase vehicle size created from the U.S. footprint-based fuel economy standards. Energy Policy 41:402–11
     [Google Scholar]
  106. Williams AM, Phaneuf DJ. 2019. The morbidity costs of air pollution: evidence from spending on chronic respiratory conditions. Environ. Resour. Econ. 74:2571–603
     [Google Scholar]
  107. Winston C. 2013. On the performance of the U.S. transportation system: caution ahead. J. Econ. Lit. 51:3773–824
     [Google Scholar]
  108. Winston C, Karpilow Q. 2019. Autonomous Vehicles: The Road to Economic Growth or Broken Dreams? Washington, DC: Brookings Inst.
  109. Wolff H. 2014. Keep your clunker in the suburb: low‐emission zones and adoption of green vehicles. Econ. J. 124:578F481–512
     [Google Scholar]
  110. Wolff H, Perry L. 2010. Policy monitor: trends in clean air legislation in Europe: particulate matter and low emission zones. Rev. Environ. Econ. Policy 4:2293–308
     [Google Scholar]
  111. Xiao J, Ju H. 2014. Market equilibrium and the environmental effects of tax adjustments in China's automobile industry. Rev. Econ. Stat. 96:2306–17
     [Google Scholar]
  112. Xiao J, Zhou X, Hu W-M 2017. Welfare analysis of the vehicle quota system in China. Int. Econ. Rev. 58:2617–50
     [Google Scholar]
  113. Xing J, Benjamin L, Li S 2019. What does an electric vehicle replace? NBER Work. Pap w25771
  114. Xu Y, Zhang Q, Zheng S 2015. The rising demand for subway after private driving restriction: evidence from Beijing's housing market. Reg. Sci. Urban Econ. 54:28–37
     [Google Scholar]
  115. Yang J, Purejav A-O, Li S 2020. The marginal cost of traffic congestion and road pricing: evidence from a natural experiment in Beijing. Am. Econ. J. Econ. Policy 12:1418–53
     [Google Scholar]
  116. Zhang W, Lin Lawell CYC, Umanskaya VI 2017. The effects of license plate-based driving restrictions on air quality: theory and empirical evidence. J. Environ. Econ. Manag. 82:181–220
     [Google Scholar]
  117. Zheng S, Zhang X, Sun W, Wang J 2019. The effect of a new subway line on local air quality: a case study in Changsha. Transp. Res. Transp. Environ. 68:26–38
     [Google Scholar]
  118. Zhong N, Cao J, Wang Y 2017. Traffic congestion, ambient air pollution, and health: evidence from driving restrictions in Beijing. J. Assoc. Environ. Resour. Econ. 4:3821–56
     [Google Scholar]
/content/journals/10.1146/annurev-resource-103119-104510
Loading
Transportation and the Environment in Developing Countries
Annual Review of Resource Economics 12, 389 (2020); https://doi.org/10.1146/annurev-resource-103119-104510
/content/journals/10.1146/annurev-resource-103119-104510
/content/journals/10.1146/annurev-resource-103119-104510
Loading

Data & Media loading...

  • Article Type: Review Article

Most Cited Most Cited RSS feed

This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error