Short and long run effects of vehicle charges : evidence from Milan , Italy

The paper analyzes the short and the long term effects on atmospheric NOx concentration of two vehicles charges introduced in Milan city center. The first policy (Ecopass) charged vehicles according to their pollution class, the second policy (Area C ) charged all vehicles equally. Using a difference in difference model with treated and untreated pollution monitoring stations in similar areas, I estimate a decrease in NOx of -8.6% with Ecopass and between -5.1% and -8.0% with Area C on the first quarter of their introduction. The effect shrinks after the first quarter and in the long run decreases even further under Ecopass, while is more persistent under Area C.