Taller Variables Ambientales

In recent years, Mexico City has found itself faced with extremely high levels of air pollution. In fact, pollution levels in this area constitute a health problem (Eskeland, 92). With the transport sector contributing to about half of the city's total emissions, it was clear that in an effort to combat the negative factors of air pollution and congestion some measures had to be taken to somehowreduce the pollution produced by automobiles.

In 1989, in an effort to alleviate congestion and pollution problems, a new program was launched. This program consisted of a regulation mandating that each car in Mexico City could not be driven on one specific day (determined by license plates) during the week. This regulation has experienced some popularity, as many people believe that this is areasonable sacrifice for individuals to make for the public good. Compliance is believed to be high in light of the high fines and highly visible police enforcement. Despite its popularity, this regulation has been shown to be both inefficient and ineffective in curbing automobile use. Some indicators even point to increases in automobile usage as a result of this policy (Eskeland, 95).

Oneproblem created by a regulation such as this is trips are regulated in a manner where it is not necessarily the least important trips which are forgone. This occurrence is an inefficient outcome. First of all, the particular trips prohibited are not those which can be most easily forgone, as the car owners do not decide which trips to forgo as the abolished trips are chosen by mandate and not bythose who can measure their importance, the car users. This program prohibits, for example, driving on a Monday. An individual may prefer to cut back on other trips throughout the week instead of all of his Monday trips. Therefore, since all of his marginal trips are not likely to happen to fall on Monday a reduction caused by such a regulation would not be efficient (Eskeland, 95).

Additionalflaws in such a policy prohibit market forces from eliminating the inefficiency. For one, trips are neither transferable between days (as indicated above) nor are they transferable between parties. Someone could conceivably lend out their car for a price, but that does not necessarily imply a substitution of trips as the lender might not have been using his car in the first place. Additionally, sincetrips are not transferable, on a given day the allocated trips are not going to their optimum uses. Two different car owners could want to make trips of a similar length, but it is likely that it will be the owners of the not-banned cars that will make the trips, not those who value them the highest.

Furthermore, even if efficiency is not a requirement of this policy, this regulation has notbeen shown in being effective. Eskeland and Feyzioglu (1995) modeled gasoline consumption as a function of both gasoline prices and income. If this regulation was to have an effect on automobile usage, then the demand function would be expected to shift in some way, either by changing the level of consumption without changing the price and income elasticities, changing the elasticities withoutchanging the level, or by affecting both. Using data from January 1987 through December 1992 they determined "there is a substantial change in the gasoline demand function associated with the regulation" (Eskeland 1995). Both the price and income elasticities shifted upwards after the regulation's implementation. When data from the post-regulation was inserted into the pre-regulation demand equation itwas found that actual demand increased after the policy in all but the first two quarters. These findings indicate that the regulation actually had a positive influence on gasoline consumption which is assumed to be a proxy for total automobile usage (Eskeland, 95).

The fact that the regulation had the opposite effect of what was intended turns out to be quite explainable.

One problem...