Effects of vehicle purchase restrictions on urban air quality: Empirical study on cities in China

With the rapid popularization of private cars in China, vehicles have become the primary source of air pollution and traffic congestion in the country. Major cities have successively applied vehicle purchase restrictions to restrict the use of private cars. This paper empirically investigates the environmental effects of vehicle purchase restrictions in six major cities of China, by using the data of daily PM10 concentration at city-level as the major indicator for air pollution. The generalized difference-in-differences model is employed to solve the problems of time inconsistency in policy implementation and discrete changes in policy intensity across cities. The empirical findings show that the restriction policy has significantly slowed down the growth of daily PM10 concentration of the policy-treated cities. Moreover, environmental effects of the policy show certain lags: the treatment effect comes from the second year after the policy implementation, increases significantly in the third year, and reaches another high level in the seventh year. The article argues that the environmental effects result from the induced choice of residents’ reducing the use of private cars and switching to alternative fuel vehicles. Hence, such purchase restriction policies should be complemented by improving the convenience of purchasing and using new-energy vehicles.