Congestion Pricing – New York City

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On January 5, New York City implemented cordon-based congestion pricing in New York City’s Central Business District (CBD), the first program of its kind in the US. Under this program, vehicles entering the CBD pay a fee – in most cases the fee is $9. Similar programs exist in other cities – most notably London and Stockholm.

The public and economists are interested in determining what impacts the implementation of congestion pricing has had on traffic. A recent study by Cook, Kreidieh, Vasserman, Allcott, Arora, van Sambeek, Tompkins and Turkel (2025) (“Cook et al.”) studied just that using an interesting econometric method – synthetic control.

The Challenge of Modeling

Determining how congestion pricing impacts the traffic in New York City is not an easy question to answer. It might be tempting to simply look at the number of cars entering the congestion zone and compare it to the time before congestion pricing started (before January 2025).

The problem with this simple approach is that each month could have different traffic patterns. For example, maybe there are fewer cars on the road in December and more in January on average This may skew the comparison making it seem like congestion pricing didn’t impact traffic flows. 

It may be tempting then to compare the same months from the prior year – January 2025 vs January 2024. However, this approach could again be problematic as there may have been shifts in car behavior between 2024 and 2025. An example of such a shift could be the fact that more workplaces in New York required people to come into the office, which means more people need to commute to work, increasing the number of cars on the road year over year. Another issue could be weather patterns – if January 2025 was colder than January 2024, this can alter car usage independent of congestion pricing. 

These external forces, such as weather patterns, return to office mandates,