Pigovian Transport Pricing in Practice

Pigovian transport pricing is implemented in a large-scale field experiment in urban areas 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 served 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.