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Name of the Asset | Congestion Charge in São Paulo City: Likely Traffic Effects
Type of Asset | Working Paper
Date | July 2013
Aiming to reduce vehicles traffic in downtown Sao Paulo (Brazil), a circulation restriction known as "rodizio" (or "rotation") was implemented in 1998. Cars with certain license plates were allowed into the city on rotation, during different days of the week. However, gridlock challenges persist. This study estimates the welfare and traffic effects of a possible congestion charge in São Paulo, as an alternative measure.
Using the microdata of the Origin-Destination survey carried out by São Paulo‟s Subway Company, this study employs discrete choice methods (Logit, Nested Logit, and Mixed Logit) to identify structural parameters, within which the likely effects on traffic flow as well as the welfare effects of the rotation system versus the congestion charge are observed.
The study showed that expanding the rotation system would mean a significant shift from car to bus travels – a desirable result for speed and de-congestion – especially in the case of work trips. This result remained robust for all econometric models that were simulated. On the other hand, the simulations on congestion charges led to a smaller shift from driving to other modes of public transportation. The rotation system was also found to more profitable for the city than congestion charges. Note that results do not take into consideration the impact of pollution and gridlocks.
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