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Subways and Road Congestion

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  • Yizhen Gu
  • Chang Jiang
  • Junfu Zhang
  • Ben Zou

Abstract

We study whether subways alleviate road congestion by examining 45 subway line launches in China and by using detailed data on road speed. Our difference-in-differences estimation finds that in the first year after a subway line is launched, rush hour speed on nearby roads increases by about 4 percent. The effect is most prominent in initially congested roads and declines over distance to the new subway line. Evidence on road speed is corroborated with substitution patterns among modes of transportation. Using auxiliary data from Beijing, we calculate that the time savings for each automobile or bus commute from faster speed is worth US$0.10.

Suggested Citation

  • Yizhen Gu & Chang Jiang & Junfu Zhang & Ben Zou, 2021. "Subways and Road Congestion," American Economic Journal: Applied Economics, American Economic Association, vol. 13(2), pages 83-115, April.
    • Handle: RePEc:aea:aejapp:v:13:y:2021:i:2:p:83-115
    DOI: 10.1257/app.20190024
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    Cited by:

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    2. Guang Chen & Akira Hibiki, 2022. "Can the Carbon Emission Trading Scheme Influence Industrial Green Production in China?," Sustainability, MDPI, vol. 14(23), pages 1-22, November.
    3. Bou Sleiman, Lea, 2023. "Displacing Congestion: Evidence from Paris," CEPREMAP Working Papers (Docweb) 2302, CEPREMAP.
    4. Shihe Fu & V. Brian Viard, 2022. "A mayors perspective on tackling air pollution," Chapters, in: Charles K.Y. Leung (ed.), Handbook of Real Estate and Macroeconomics, chapter 16, pages 413-437, Edward Elgar Publishing.
    5. Li, Tianshu & Song, Shunfeng & Yang, Yanmin, 2022. "Driving restrictions, traffic speeds and carbon emissions: Evidence from high-frequency data," China Economic Review, Elsevier, vol. 74(C).
    6. Lee, Wang-Sheng & Tran, Trang My & Yu, Lamont Bo, 2023. "Green infrastructure and air pollution: Evidence from highways connecting two megacities in China," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).
    7. Jindong Pang & Shulin Shen, 2023. "Do ridesharing services cause traffic congestion?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(2), pages 520-552, May.
    8. Ioulia V Ossokina & Jos van Ommeren & Henk van Mourik, 2023. "Do highway widenings reduce congestion?," Review of Finance, European Finance Association, vol. 23(4), pages 871-900.
    9. Ai, Hongshan & Zhong, Tenglong & Zhou, Zhengqing, 2022. "The real economic costs of COVID-19: Insights from electricity consumption data in Hunan Province, China," Energy Economics, Elsevier, vol. 105(C).
    10. Ai, Hongshan & Zhou, Zhengqing & Li, Ke & Kang, Zhi-Yong, 2021. "Impacts of the desulfurization price subsidy policy on SO2 reduction: Evidence from China's coal-fired power plants," Energy Policy, Elsevier, vol. 157(C).
    11. Ioulia V Ossokina & Jos van Ommeren & Henk van Mourik, 2023. "Do highway widenings reduce congestion?," Journal of Economic Geography, Oxford University Press, vol. 23(4), pages 871-900.
    12. Chen, Liming & Lu, Yang & Nanayakkara, Aruna, 2023. "Rural road connectivity and local economic Activity: Evidence from Sri Lanka’s iRoad program," Transport Policy, Elsevier, vol. 144(C), pages 49-64.

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    More about this item

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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