Have driving restrictions reduced air pollution: evidence from prefecture-level cities of China

With rapid economic development, air pollution became a serious problem in China. Vehicle's exhaust emissions are among the main sources of air pollution. With samples of 173 prefecture-level cities in China from 2006 to 2016, this paper takes the implementation of driving restrictions as a quasi-natural experiment to examine the relationship between driving restrictions and air quality through the difference-in-differences method based on the propensity score matching. Results indicate that driving restrictions have not improved the air quality in terms of average treatment effect as there is no clear evidence that people turn from private cars to busses or subways. Furthermore, heterogeneous effects of driving restrictions exist across different regions and cities of China. The implementation of driving restrictions has significantly positive impacts on air pollution in the Eastern and Central cities of China, while it has significantly negative effects in non-capital cities. This study implies that the development of local public transportation needs to be taken into account when formulating the policy of driving restrictions.