Thursday, 3 August 2017

The unintended consequences of carless days

One of my favourite parts of teaching ECON110 (ok, there are many, but this is one is a particular favourite) is discussing the unintended consequences of well-intended policies. That's why I enjoyed reading this article on carless days from Sunday's New Zealand Herald:
Today is the anniversary of former Prime Minister Robert Muldoon's introduction of carless days in 1979, a policy his critics consider an emblem of his attempts to control all aspects of the economy.
Carless days were intended to reduce car use and petrol consumption following the second oil shock of the 1970s. Much of New Zealand's crude oil came from Iran, but the Middle Eastern country's output shrank because of the revolution that began there in 1978, causing a worldwide shortage of oil...
Under the carless days rules, owners had to pick one day of the week on which they wouldn't drive their car. They would get a sticker to put on their car's windscreen and there was a different colour for each day of the week.
Driving a car on a carless day risked a fine of up to $400 under the regulations, which were made by the Government under the 1948 Economic Stabilisation Act.
Exemption stickers could be obtained by firefighters, doctors and other "essential users"...
Carless days were scrapped in May 1980 - and motoring and cycling advocates don't want them revived.
"It didn't work at the time because people tried to circumvent it," said Automobile Association spokesman Mike Noon.
"People used another vehicle instead of having a day off because in a lot of cases they still needed a vehicle to get to work; there wasn't an alternative so they flouted it."
If petrol prices are high (as they were in the 1970s), then there is a strong incentive to use a car that gets good mileage (i.e. one that doesn't use much petrol). But, if everyone is wanting cars with better mileage, those cars are going to be a bit more expensive than cars with worse mileage. So, if you buy a second car (to use on your carless day for your efficient car), chances are the second car uses more petrol. Which really defeats the purpose of the carless days.


  1. I watched an episode of Westside tonight (s1e6). Carless days were a feature, they would print fake labels for all days of the week - and sell them for a high price. I'm sure if carless days were introduced today they would be able to use an electronic database or go as far as the car computer system would allow the car to start on certain days.

  2. Fake labels were also a feature of the carless days, according to the article. For people willing to go the the trouble of getting a fake label, I imagine that getting someone to hack the car's computer to allow it to start on its carless day would not be a big step.

    Electronic databases are what we have now for WOF, but that doesn't stop unwarranted cars from regularly being driven. Enforcement would be an issue.