Affordability of public transport, a methodological clarification
economics - subsidy, policy - equity, policy - fares
poverty, transport affordability, welfare economics, transport subsidies
There has been a surge of interest recently on the relation between poverty and transport policies. When analysing the relation between poverty and transport, concern often centres on the affordability of public transport. In this paper we present two alternative definitions of affordability used in the transport literature and discuss their limitations. Any affordability measure covering only transport expenditure is bound to be a very partial view of household welfare. In addition, the required affordability benchmark to determine whether or not transport costs are high is arbitrary. Therefore, the approach that uses the absolute level of these affordability measures is meaningless. We also show in this paper that the change in the affordability measures, as opposed to its absolute level, can be given a more rigorous interpretation in terms of traditional welfare economics. In spite of this last result, we argue that to analyse whether transport subsidies are meeting their social or distributional objectives it may be more fruitful to use traditional income distributional tools such as the relative benefit curve and its associated Gini coefficient.
Permission to publish the abstract has been given by the Journal of Transport Economics and Policy (JTEP), copyright remains with them.
Gómez-Lobo, A. (2011). Affordability of public transport, a methodological clarification. Journal of Transport Economics and Policy (JTEP), Vol. 45, (3), pp 437-456.