Determining The Causal Effect of Gothenburg’s Congestion Tax on Vehicle Mileage : A Synthetic Control Study Using Swedish Municipal Data

Sammanfattning

This thesis investigates the causal effect of the 2013 congestion tax in Gothenburg on total driving volume, measured as average mileage levels per privately owned passenger car. By applying the synthetic control method, Gothenburg’s counterfactual mileage tra- jectory in the absence of the congestion tax is approximated using a synthetic control unit constructed as a weighted average of other Swedish municipalities without a congestion tax. The study uses municipal panel data for the period 2000–2020. The results indicate that the introduction of the congestion tax in Gothenburg was followed by an average de- crease in mileage levels of approximately 132.71 kilometers per privately owned passenger car during the period 2014–2020. The credibility of the result is assessed using various placebo tests, which provide mixed evidence regarding the strength of the estimated ef- fect. When the relevance of the placebo tests is taken into consideration, the estimated effect for Gothenburg appears relatively large compared with the placebo effects observed for the untreated units. It is concluded that the congestion tax appears to have reduced the total driving volume in Gothenburg, although uncertainty remains due to limitations in the outcome variable and potential spillover effects.