The impact of road pricing on housing prices: Preliminary evidence from Milan

Road pricing is increasingly used as an economic tool to decrease the burden of transport externalities. Following the examples of several cities worldwide, on 2nd January, 2008, the city of Milan introduced a charge for accessing the city centre with the aim of curbing air pollution and congestion. The aim of this paper is to evaluate empirically the effect of such a charge on the housing market. By applying a difference-in-differences methodology, I find empirical support for a decrease in housing prices in the coverage area.