The effects of public transport subsidies for lower-income users on public transport use: A quasi-experimental study

Document Type

Journal Article

Publication Date

2022

Subject Area

place - south america, place - urban, economics - subsidy, economics - pricing, ridership - disadvantage

Keywords

Subsidy, Public transport, RDD, Ridership, Public transport pricing, Bogotá

Abstract

To increase public transport use, especially for individuals with lower incomes, many cities worldwide have introduced subsidies for public transport systems. However, quantitative evidence of their effects on actual ridership remains scarce, especially in Global South countries. Using a quasi-experimental regression discontinuity design (RDD) in combination with administrative data for all personalized travel cards of public transport users during the years 2017–2019 in Bogotá, Colombia, the present paper assesses the causal effect of a transport subsidy focused on low-income individuals on the number of trips that individuals undertake. Our results show that the subsidy, equaling 32% of the regular fare, significantly and substantially increases the total number of monthly public transport trips. However, the results suggest that the size of the subsidy's effect on ridership has decreased over time, while also evidencing a more pronounced effect among economically active individuals compared to inactive ones. Overall, our results suggest that public transport subsidies for low-income individuals can be an effective way for increasing public transport use among this population segment, which may translate into improved well-being because of improved access to local labor markets and recreational activities.

Rights

Permission to publish the abstract has been given by Elsevier, copyright remains with them.

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http://www.sciencedirect.com/science/journal/0967070X

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