Welfare Analysis of Informal Transit Services in Brazil and the Effects of Regulation
AbstractIn Brazil, the recent explosion of informal transport activity is having profound effects on formal, regulated transport systems and is the source of great controversy in the urban passenger transportation arena. A variety of policies are being proposed to manage what has been an uncontrolled growth of the sector. This study seeks to understand the advantages these systems have for users who choose them, and how proposed policies will impact these benefits. A corridor in Rio de Janeiro with substantial informal activity was used as a case study and field trips were made to gather basic data and perform travel surveys. Standard measures of welfare changes in a discrete choice framework were used to measure the proposed policiesâ€™ welfare impacts on users. Eleven candidate policies were evaluated, ranging from the eradication of the informal modes and investment in formal modes, to the legalization and regulation of the informal modes. Benefits were compared with costs to discuss policiesâ€™ efficiencies, and the distribution of benefits across income classes was explored. Net benefits from some policies were found to be substantial, on the order of hundreds of dollars per year per commuter, a significant share of the typical yearly earning of 2000 dollars (US). Legalizing the informal sector was found to benefit users only slightly but further investments in the sector are probably inefficient. Users benefited most from improvements in formal mass transit modes (trains and buses), on the order of 50 to 100 dollars per commuter per year. Finally, policies to foster a competitive environment for the delivery of both informal and formal services was shown to benefit users, on the order of 50 dollars per commuter per year. These best policies are discussed in light of current and past management practices in the sector. High costs of investments, an environment resistant to and unfamiliar with open and competitive bidding for concessions, and difficulties in the enforcement of regulations will threaten the successful implementation of these policies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of California Transportation Center in its series University of California Transportation Center, Working Papers with number qt0pf40632.
Date of creation: 01 Jan 2003
Date of revision:
Contact details of provider:
Postal: 109 McLaughlin Hall, Mail Code 1720, Berkeley, CA 94720-1720
Web page: http://www.escholarship.org/repec/uctc/
More information through EDIRC
Social and Behavioral Sciences;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Niskanen, Esko, 1987. "Congestion tolls and consumer welfare," Transportation Research Part B: Methodological, Elsevier, vol. 21(2), pages 171-174, April.
- K. M. Gwilliam, 2001. "Competition in Urban Passenger Transport in the Developing World," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 35(1), pages 99-118, January.
- E A Vasconcellos, 1997. "The making of the middle-class city: transportation policy in Sao Paulo," Environment and Planning A, Pion Ltd, London, vol. 29(2), pages 293-310, February.
- Small, Kenneth A., 1983. "The incidence of congestion tolls on urban highways," Journal of Urban Economics, Elsevier, vol. 13(1), pages 90-111, January.
- Harvey S. Rosen & Kenneth A. Small, 1981.
"Applied Welfare Economics with Discrete Choice Models,"
NBER Working Papers
0319, National Bureau of Economic Research, Inc.
- Small, Kenneth A & Rosen, Harvey S, 1981. "Applied Welfare Economics with Discrete Choice Models," Econometrica, Econometric Society, vol. 49(1), pages 105-30, January.
- Anders Karlstrom, 2003. "A Simple Method of Incorporating Income Effects into Logit and Nested-Logit Models: Theory and Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 248-253.
- Bhat, Chandra R., 1998. "Accommodating variations in responsiveness to level-of-service measures in travel mode choice modeling," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(7), pages 495-507, September.
- Jara-Díaz, Sergio R. & Farah, Marcelo, 1987. "Transport demand and users' benefits with fixed income: The goods/leisure trade off revisited," Transportation Research Part B: Methodological, Elsevier, vol. 21(2), pages 165-170, April.
- Swait, Joffre & Ben-Akiva, Moshe, 1987. "Empirical test of a constrained choice discrete model: Mode choice in São Paulo, Brazil," Transportation Research Part B: Methodological, Elsevier, vol. 21(2), pages 103-115, April.
- Cervero, Robert & Golub, Aaron, 2007. "Informal transport: A global perspective," Transport Policy, Elsevier, vol. 14(6), pages 445-457, November.
- Aaron Golub & Ronaldo Balassiano & Ayres Araújo & Eric Ferreira, 2009. "Regulation of the informal transport sector in Rio de Janeiro, Brazil: welfare impacts and policy analysis," Transportation, Springer, vol. 36(5), pages 601-616, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff).
If references are entirely missing, you can add them using this form.