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Efficiency and Substitutability of Transit Subsidies and Other Urban Transport Policies

Author

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  • Leonardo J. Basso
  • Hugo E. Silva

Abstract

This paper analyzes the efficiency of and the substitutability between three urban congestion management policies: transit subsidization, car congestion pricing, and dedicated bus lanes. The model features user heterogeneity, cross-congestion effects between cars and transit, intertemporal and total transport demand elasticities, and is simulated using data for London, UK and Santiago, Chile. We find that the substitutability between policies is large and, in particular, the marginal contribution of increased transit subsidies, as other policies are implemented first, diminishes rapidly. Bus lanes are an attractive way to increase frequencies and decrease fares without injecting public funds.

Suggested Citation

  • Leonardo J. Basso & Hugo E. Silva, 2014. "Efficiency and Substitutability of Transit Subsidies and Other Urban Transport Policies," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 1-33, November.
    • Handle: RePEc:aea:aejpol:v:6:y:2014:i:4:p:1-33
    Note: DOI: 10.1257/pol.6.4.1
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    References listed on IDEAS

    as
    1. Rodrigo Fernandez & Rosemarie Planzer, 2002. "On the capacity of bus transit systems," Transport Reviews, Taylor & Francis Journals, vol. 22(3), pages 267-293, January.
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    More about this item

    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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    1. Efficiency and Substitutability of Transit Subsidies and Other Urban Transport Policies (American Economic Journal: Economic Policy 2014) in ReplicationWiki

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