VoxEU Column Environment Health Economics

Congestion charges and children’s health

Traffic congestion is a major problem for urban centres. Among various negative externalities, traffic creates substantial pollution which can impact the health of residents. This column explores how the implementation of a congestion pricing zone affected the health of children in Stockholm. The programme saw short-term reductions in common traffic pollutants and an accompanying decrease in children’s hospital visits for acute asthma. This decrease grew larger the longer the tax was in place. 

Traffic congestion is a growing concern around the world. Economists have long recognised the negative externalities associated with traffic congestion and have suggested congestion pricing as a possible solution (Vickrey 1969).A number of cities, including London, Singapore, and Stockholm, have implemented traffictolls in an effort to reduce congestion. Proponents of congestion pricing point to reduced commuting times and lower fuel consumption, with potentially beneficial effects on the environment. Recent research suggests that traffic pollution has the ability to impact the health and well-being of nearby residents, and in particular vulnerable groups such as infants, children, and the elderly (Currie and Walker 2011, Knittel et al. 2016). Yet the health effects of the implementation of congestion tolls have not been analysed in detail until recently. 

In a recent paper, we examine the effects of implementing a congestion tax in Stockholm on pollution levels and the health of children residing within the congestion pricing zone (Simeonova et al. 2018). Traffic exhaust is the leading cause of air pollution in cities, containing a high concentration of pollutants such as particulate matter, carbon monoxide, and nitrogen dioxide. It is well-established in the medical literature that these pollutants irritate the airways and can have detrimental effects on respiratory health, especially in children (Gauderman et al. 2000, Yu et al. 2000, Hoek et al. 2000, Lipsett et al. 1997, Shima et al. 2000). Infants and children are particularly sensitive to high levels of pollution because their lungs are still developing. Exposure, and in particular long-term exposure, to harmful environmental conditions in childhood can lead to chronic inflammation (manifesting itself in asthma or bronchitis), and significant negative effects on long-term health among the affected individuals. 

As traffic congestion in cities has increased, rates of respiratory illness such as asthma have risen (Centers for Disease Control 2011). Asthma is now the leading cause of hospitalisation among children in the US. The increase in asthma rates is highest amongst low socio-economic status individuals who disproportionately live in densely populated areas characterised by frequent and often severe traffic congestion. With both traffic congestion and children’s asthma rates trending upwards in recent years, some have speculated that the two may be related.

There are a number of research papers investigating how air pollution affects children’s respiratory health. They have generally focused on the impacts of short-term variations in air pollution lasting between several hours and a few days (Friedman et al. 2001, Neidell 2004, Neidell and Moretti 2011, Schlenker and Walker 2015, Jans et al. 2016). Schlenker and Walker (2012), for example, use the variation in daily airport congestion rates as a cause of increased carbon monoxide emissions that they link to hospital admissions for respiratory conditions. Bauernschuster et al. (2015) show that during days in which the German public transport workers strike there is increased pollution due to heavier car traffic into major cities as well as increased rates of hospitalisations for respiratory conditions among children younger than five and the elderly. Both studies rely on high-frequency short-term (day-to-day) variation in pollution levels to isolate congestion effects on health. We examine both the effect of a six-month long reduction in air pollution (associated with the trial of congestion pricing in Stockholm) and the effects of the later longer-term reduction in pollution that accompanied the permanent implementation of the congestion tax.

The experiment in the Swedish capital offers a compelling study in the effects of congestion pricing on pollution and children’s health. It has been established in the medical literature that children who live in more polluted areas are more likely to suffer from potentially debilitating respiratory conditions such as asthma, but it has been challenging to establish a causal link between traffic pollution and health. This is because factors that affect children’s health may also affect where families locate. For example, some families may elect to live in areas with lower pollution, but also adopt other measures, such as eating nutritious foods and going for regular physical check-ups that would result in better health for their children. Thus, if we were to interpret the correlation between high pollution and bad health as causal, we would be mistakenly interpreting this selection as a direct link between pollution and health. In the absence of an experiment that would randomly locate households in areas with different levels of pollution, we use the quasi-experiment that took place in Stockholm during the trial and permanent implementation of a congestion pricing zone (CPZ). 

The congestion pricing experiment 

Since August 2007, Stockholm has levied charges on most vehicles entering the city centre. Congestion pricing was first introduced for six months in central Stockholm on a trial basis in January 2006. Vehicles entering the CPZ were subject to a fee of zero to US$2.60, depending on time of day, and fees were collected automatically using license-scanning technology. During the trial period, traffic in the CPZ declined by almost a quarter. The trial ended in July 2006, but traffic levels never returned to their pre-trial high. The government re-implemented congestion pricing on a permanent basis following a referendum in August 2007.

We combine this programme variation in congestion fees with data on ambient air pollution and administrative data on all inpatient and outpatient health visits for the population of children residing inside the CPZ and in other Swedish cities. We compare outcomes within the Stockholm city centre to outcomes in other city centres within Sweden that did not have a congestion pricing program, in an effort to form a counterfactual for what would have happened in the absence of the program. The idea is that in the absence of the congestion pricing, pollution and the rate of acute asthma attacks among children in Stockholm would have been similar to those in other large Swedish cities. In total, we use data from more than 90 cities in Sweden. 

Effects on pollution

Relative to other central cities in Sweden, levels of common traffic pollutants such as nitrogen dioxide (NO2) and particulate matter (PM10) in Stockholm fell by 5–7.5% and 15–20%, respectively, during the trial period. 

Figure 1 Scatterplot of differences in measured pollution inside the congestion zone and in other cities by implementation period

Note: The vertical lines indicate the beginning and end of the trial period and the beginning of the permanent CPZ.

This policy-induced reduction in air pollution levels was accompanied by significant reductions in the incidence of childhood asthma in Stockholm in the months and years after the programme went into place. Reductions in air pollution from traffic by one unit decreased visits for acute asthma to inpatient and outpatient providers by 4–15%, depending on the length of exposure to reduced pollution.

Effects on children’s health

We examined how the implementation of the congestion pricing zone and subsequent reductions in air pollution affected the incidence of acute asthma attacks among children aged up to five. These are serious health episodes that require immediate medical attention. This rate was measured using data from unplanned urgent outpatient visits and overnight hospitalisations. The focus is on young children because they are less likely to have learned how to control their asthma on their own and because they are less likely to spend substantial parts of the day away from their parents’ primary residence. 

Figure 2 Asthma rates inside the Stockholm CPZ relative to other cities

Note: The vertical lines indicate the beginning and end of the trial period and the beginning of the permanent CPZ.

Because pollution has a cumulative effect on asthma that is not immediately reversed, the effect of a short-run decrease in pollution may be quite different than the longer-term effect of a permanent decrease in pollution. Indeed, we find evidence that the decline in these acute asthma episodes happens over time and grows larger the longer children have been exposed to cleaner air. Asthma rates continue to fall even during the period when the congestion pricing is not in place, the period between the end of the trial and the permanent implementation of the policy. Comparing the permanent policy era to the pre-trial period, asthma cases in the CPZ area fell by 8.7 per 10,000 children. This is a decrease of over 40% relative to the rate before the trial. These large positive effects on children’s respiratory health have not yet been properly accounted in the policy evaluation of the Stockholm CPZ. It is clear that in addition to reducing travel times and pollution, congestion charges in large cities can have significant positive effects on health in the short term, but even larger effects in the longer term as population health evolves to a new, higher level consistent with the lower rates of ambient pollution. 


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