Cultural Constraints and Policy Implementation: Effects of the Beijing License Plate Lottery on the Environment

Can culture constrain policy implementation - and if so, under what conditions and for whom? In this paper, we test to what extent traditional values of numerology in China impeded the environmental benefits of a well-designed license plate policy. We take advantage of two natural experiments in Beijing. First, in 2008 authorities began limiting cars on the road by restricting specific plate numbers each day. Second, in 2011 authorities introduced a lottery policy-making it difficult to obtain any plate. We find that (1) non-traditionalists abandoned cultural norms, accepted non-lucky plate numbers, and switched to newer, greener vehicles, whereas (2) traditionalists - fearing the loss of their lucky plate numbers - held on to their older pollutant-emitting cars. We test our argument using a CO readings dataset, a Beijing driver survey, and a license plate image database. We find strong evidence that emissions were lower when lucky numbers were restricted, and the pattern strengthened gradually over time.