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Does Supporting Passenger Railways Reduce Road Traffic Externalities?

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  • Lalive, Rafael
  • Luechinger, Simon
  • Schmutzler, Armin

Abstract

Many governments subsidize regional rail service as an alternative to road traffic. This paper assesses whether increases in service frequency reduce road traffic externalities. We exploit differences in service frequency growth by procurement mode following a railway reform in Germany to address endogeneity of service growth. Increases in service frequency reduce the number of severe road traffic accidents, carbon monoxide, nitrogen monoxide, nitrogen dioxide pollution and infant mortality. Placebo regressions with sulfur dioxide and ozone yield no effect. Service frequency growth between 1994 and 2004 improves environmental quality by an amount that is worth approximately 28-40 % of total subsidies. An analysis of household behavior shows that the effects of railway services on outcome variables are driven by substitution from road to rail.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9335.

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Date of creation: Feb 2013
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Handle: RePEc:cpr:ceprdp:9335

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Keywords: Pollution; Public Transport; Railways; Road Accidents;

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  1. Janet Currie & Johannes F. Schmieder, 2008. "Fetal Exposure to Toxic Releases and Infant Health," NBER Working Papers 14352, National Bureau of Economic Research, Inc.
  2. Gilles Duranton & Matthew A. Turner, 2009. "The Fundamental Law of Road Congestion: Evidence from US cities," Working Papers tecipa-370, University of Toronto, Department of Economics.
  3. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. Lalive Rafael & Schmutzler Armin, 2008. "Entry in Liberalized Railway Markets: The German Experience," Review of Network Economics, De Gruyter, vol. 7(1), pages 1-16, March.
  5. Janet Currie & W. Reed Walker, 2009. "Traffic Congestion and Infant Health: Evidence from E-ZPass," NBER Working Papers 15413, National Bureau of Economic Research, Inc.
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  7. Kenneth Y. Chay & Michael Greenstone, 2003. "Air Quality, Infant Mortality, and the Clean Air Act of 1970," NBER Working Papers 10053, National Bureau of Economic Research, Inc.
  8. Rafael Lalive & Armin Schmutzler, 2011. "Auctions vs negotiations in public procurement: which works better?," ECON - Working Papers 023, Department of Economics - University of Zurich.
  9. Armin Schmutzler, 2011. "Local Transportation Policy and the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(3), pages 511-535, March.
  10. Janet Currie & Matthew J. Neidell & Johannes Schmieder, 2008. "Air Pollution and Infant Health: Lessons from New Jersey," NBER Working Papers 14196, National Bureau of Economic Research, Inc.
  11. Simon Luechinger, 2009. "Valuing Air Quality Using the Life Satisfaction Approach," Economic Journal, Royal Economic Society, vol. 119(536), pages 482-515, 03.
  12. Chay, Kenneth & Dobkin, Carlos & Greenstone, Michael, 2003. " The Clean Air Act of 1970 and Adult Mortality," Journal of Risk and Uncertainty, Springer, vol. 27(3), pages 279-300, December.
  13. Kenneth Y. Chay & Michael Greenstone, 2003. "The Impact Of Air Pollution On Infant Mortality: Evidence From Geographic Variation In Pollution Shocks Induced By A Recession," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 1121-1167, August.
  14. Lucas W. Davis, 2008. "The Effect of Driving Restrictions on Air Quality in Mexico City," Journal of Political Economy, University of Chicago Press, vol. 116(1), pages 38-81, 02.
  15. Mendelsohn, Robert & Orcutt, Guy, 1979. "An empirical analysis of air pollution dose-response curves," Journal of Environmental Economics and Management, Elsevier, vol. 6(2), pages 85-106, June.
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