Effectiveness and monetary impact of Milan's road charge, one year after implementation

In early 2008, a pollution charge was introduced in the central Area of Milan. Although initially it positively affected traffic volume, after some years its effect wore off due to the replacement of older vehicles with newer and exempt vehicles. As effectiveness decreased, in June 2011 the Milan citizens voted in a referendum on whether to extend the charge to all vehicles. The result was clearly in favor of the redesign and extension of the toll. In January 2012 the new policy was put in force under the name of “Area C.” The new pricing uses the same technological infrastructure and encompasses the same Area but evolves into congestion pricing aimed at reducing traffic in the compact and crowded central city. The present article discusses the history of the Milan road-pricing case and presents some quantitative analyses of the overall effectiveness of the measure, based on official data. In addition, we calculate, using cordon data, the distribution of entrances per vehicle category and the related yearly cost paid by users. The analyses show the measure's effectiveness, in line with expectations, and calculate the economic impact of the pricing on different user groups. Such impact appears quite limited, as the vast majority of users cross the cordon occasionally, and the most affected user groups (e.g., residents) are granted with more favorable conditions.