How uncapping the Swiss franc led to more car accidents

Soaring franc causes Swiss shoppers to pop across to Italy each morning – while Italian workers head in the other direction. A strong franc increased daily traffic at the Swiss border as shoppers left and workers arrived, according to new research by Piera Bello, presented at the Royal Economic Society's annual conference at the University of Bristol in April 2017.

The study finds that as the Swiss franc appreciated in value against the euro by 20% between 2008 and 2011 (and when it suddenly jumped in value after the Swiss government abandoned its exchange rate peg in 2015), daily commuters from Italy were attracted to work in the Canton of Ticino. At the same time, the residents of Ticino were more likely to cross the border to Italy to go shopping.

In total, a 10% appreciation of the Swiss franc increased the traffic flows at the border by between 2 and 3%. It also increased the number of car accidents.

This is the first study to scrutinise the effects of exchange rate fluctuations on cross-border shopping in a European context. It also provides first evidence of cross-border commuters' sensitivity to exchange rate movements, never before formally documented in economic research.

Read more about the research here