Essays in the Economics of Transportation Policy

The following document presents three essays in the economics of transportation policy. The provision of transport infrastructure remains largely a government function and with the increase in population and vehicle ownership, travel demand management is increasing in scope. Policies aimed to reduce the negative externalities associated with travel, namely congestion and air pollution, have been increasing both on the federal and state levels. In the aftermath of the 1970's oil crises, government role in shaping vehicle fuel economy was considered essential. This paved the road to the Corporate Average Fuel Economy (CAFÉ) standards, which mark one major policy approach in transportation. However, in the early 2000's U.S. fleet fuel economy was decreasing and it became clear that CAFÉ standards are not sufficient to encourage both the supply and demand for fuel-efficient vehicles. With the growing concerns over the impact of greenhouse gas (GHG) emissions on climate change and, together with the lack of regulatory action on the federal level, states sought to craft their own transportation policies that address these needs. California has been a leader in transportation policy that addresses vehicles' GHG emissions and has paved the road for other states to adopt stringent environmental standards. The first essay presents an analysis of California's Clean Air Vehicle Sticker program, which provided single-occupancy privileges to hybrid vehicles on High Occupancy Vehicles (HOV) lanes. Such privileges have been granted by a few states with the goal of stimulating demand for hybrid vehicles. Using microdata of new vehicle sales, I investigate the effects of the program, giving special attention to the phases of its implementation. I find that the initial period of the program had the most effect on sales volume, and present evidence that vehicle prices increased during the second phase. Contrary to previous investigations I find that the program, on average, increased sales of hybrid vehicles by 20%. Furthermore, I show that the sales of vehicles not eligible for access rights were positively affected by the program. The second essay surveys congestion pricing theory and policies in California. Congestion costs in California are substantial and increasing, leading the California legislature to explore the use of congestion pricing schemes to manage congestion in the state's major metropolitan areas. I examine the nature of the CAVS program as a time savings subsidy, and comment on Valuation of Time of California drivers who received such benefits. I find that providing some hybrid vehicles with HOV access privileges capitalized in their value, increasing it by nearly $3000. The last essay provides a historical overview of U.S. transport emissions, tracing transport CO2 emissions by mode for 1960-2008. Changes in emissions are divided into components related to overall population and economic growth, transport mode shift, changes in the ratio of fuel used to passenger or tonne-km of activity, and changes in the CO2 content of fuels. A decomposition of these changes using Log-Mean Divisia Index and Laspeyres method is provided, illuminating the role of each factor that contributed to the rise in emissions. From this decomposition I speculate to what extent each factor would be important in the future, and what other factors could reduce emissions. This thorough decomposition is imperative for the crafting of transport policy that aims to address climate change