Working Papers

The Impact of Taxing Polluting Vehicles on Local Economic Activities

Road transport significantly contributes to environmental degradation and public health risks, prompting policymakers to implement measures aimed at reducing private car use. While these policies address critical environmental challenges, they may also have unintended consequences on local economic activities by increasing transportation costs. This paper examines the economic impact of a vehicle emissions charge on small businesses in Milan, where a charging zone was introduced with fees determined by vehicle pollution levels. Using geo-referenced firm-level data, I provide causal estimates of the policy’s effect on local economic activity. The findings show that the charges negatively affect only the sales of retail businesses, while leaving other sectors – less reliant on customer visits – unaffected. The most impacted retail firms – experiencing a sales reduction exceeding 30 percent – are those located inside the charging zone and near its boundary, likely due to a significant share of their customer base residing outside the area. The negative effect diminishes rapidly for activities located deeper within the zone. Moreover, affected stores were able to adjust their costs in response to the decline in revenues, resulting in no observable impact on profits, closures, or relocations.  

Work in Progress

Pollution, Traffic reduction and Electoral outcomes (with Davide Cipullo and Tommaso Colussi) 

Differential Treatments and Spillovers in Regression Discontinuity Designs 

Mortality Beliefs and Long-term Investments (with Claudia Curi, Andreas Dibiasi, Matteo Ploner and Mirco Tonin) 

Culture and Pension Savings  (with Claudia Curi, Andreas Dibiasi, Matteo Ploner and Mirco Tonin)