In January 2006, a system for congestion charging was introduced in the city of Stockholm, Sweden. The charging scheme was run in the form of a full scale trial for seven months, after which it was deactivated, awaiting its evaluation and an advisory public referendum. Several parties, including...

We provide a framework for setting congestion charges that reflect emission and congestion externalities and policy responses, such as vehicle ownership, driving, and residential sorting. Using Swedish administrative microdata, we identify these responses by exploiting a temporary exemption for...