UCLA

License-plate-based driving restrictions are among the highest profile policies for local governments to address congestion and air pollution. Cities as varied as Sao Paulo, Paris, Tianjin, and New Delhi have enacted temporary or permanent restrictions to improve local air quality. Using household travel survey data and a research design based on the abrupt shift in how the policy applies to 10-year-old vs. 9-year-old vehicles, we evaluate the impact of Hoy No Circula, one of the earliest and most studied driving restrictions, in Mexico City. In line with previous studies, we find that Hoy No Circula has done little to reduce overall vehicle travel, but we reject the prevailing theory that its lack of success is due to perverse incentives for households to buy second cars. Instead, we highlight the range of other, less costly ways that people adjust behavior to avoid the restrictions. Although no single behavior dominates, most households — particularly those that own older, higher-polluting vehicles — do not use their car every weekday regardless of the restriction. As a result, it is relatively easy to shuffle travel from restricted days to unrestricted days and thus avoid the ban. Shuffling travel days is less costly, more immediately available, and far simpler for most households than buying a second car.