Anders Anderson, Harrison Hong, 02 June 2022

Electric bikes are a viable alternative to cars in urban areas, but how effective they are at reducing carbon emissions is unclear. This column finds that a 2018 Swedish e-bike subsidy programme was successful in persuading people to buy an e-bike, and there was considerable substitution of biking for driving. However, for the programme to be cost-effective, the social cost of carbon needs to be much higher than the $50 to $100 estimates frequently discussed. Other social benefits, such as stimulating adoption, promoting health or reducing congestion, are needed to motivate these interventions. 

Francis Ostermeijer, Hans Koster, Jos van Ommeren, Victor Nielsen, 08 March 2022

Cars have changed the way cities are organised. This column uses a sample of 123 cities in 57 countries to show that car ownership reduces the density of people and employment by allowing low-density expansion into the urban periphery. The findings have implications for cities in developing countries, where strong car ownership increases are expected in the near future. If these countries follow a similar path, their cities will be more spread out. This is likely to cause more traffic congestion, as lower-density areas tend to be more car-dependent. 

Rémi Jedwab, Jason M. Barr, Jan K. Brueckner, 28 February 2021

Housing prices in many countries are growing faster than incomes. Much of this affordability problem can be explained by regulatory barriers to new construction. This column calculates countries’ ‘building-height gaps’ – the difference between the total height of a country’s stock of tall buildings and what the total height would have been if building height regulations were relatively less stringent, based on parameters from a benchmark set of countries. These gaps are larger for richer countries and for residential buildings rather than for commercial buildings, and they correlate strongly with housing prices, sprawl, congestion, and pollution. 

Taylor Jaworski, Carl Kitchens, Sergey Nigai, 01 November 2020

The interaction between domestic transportation networks, market integration, and globalisation is important for understanding the value of domestic infrastructure investment and weighing these against the substantial costs of building and maintaining domestic roads. Using an endogenous specification of domestic and international trade costs that takes into account the availability of the road network and congestion levels, this column estimates that the total value of the entire US highway system was $619 billion in 2012 dollars, which accounts for 3.9% of US aggregate GDP in 2012. The results suggest that decisions on how much to invest in domestic infrastructure should be made in conjunction with considering how improvements in the domestic transportation networks would affect domestic and international trade as well as distributional consequences for different locations within a country.

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