RATIONING CAN BACKFIRE - THE DAY WITHOUT A CAR IN MEXICO-CITY

A ban restricting each car from driving on a specified weekday is foun d to have increased total driving in Mexico City. Because of the ban, cars effectively represent ''driving permits,'' and some households ha ve bought an additional car and increased their driving. Greater use o f old cars, congestion effects, and increased weekend driving may also have contributed to the disappointing results. The ban has high welfa re costs and does not deliver the intended benefits of reduced driving -quite the contrary. The experience provides an interesting lesson in applied welfare economics. Theory indicates that this is a costly way of reducing traffic and pollution. But the finding that the strategy i s counterproductive could be made only with applied quantitative analy sis.