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A new look at the incidence of public transport subsidies: a case study of Santiago, Chile

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  • Andrés Gómez-Lobo

Abstract

Most public transport subsidies in developing countries are justified on equity or social grounds. However, it is not clear how well current subsidies meet these objectives. In this paper we evaluate several public transport subsidies in the case of Santiago, Chile. This is an interesting case study because direct mean tested monetary transfers have been used in recent years to distribute public transport subsidies rather than use more traditional supply side sectoral subsidies. The results show that using the general welfare system to distribute transport subsidies performs much better than traditional supply side subsidies. The latter are very badly targeted and in some cases quite regressive. Together with some recent evidence from other developing country cities, the results of this paper imply that more effort needs to be placed on the analysis, design and implementation of social subsidies in the transport sector.

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Bibliographic Info

Paper provided by University of Chile, Department of Economics in its series Working Papers with number wp253.

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Date of creation: Aug 2007
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Handle: RePEc:udc:wpaper:wp253

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Web page: http://www.econ.uchile.cl/
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  1. Kristin Komives & Vivien Foster & Jonathan Halpern & Quentin Wodon & Roohi Abdullah, 2008. "Water, Electricity, and the Poor : Who Benefits from Utility Subsidies?," World Bank Other Operational Studies 11745, The World Bank.
  2. Engel, Eduardo M. R. A. & Galetovic, Alexander & Raddatz, Claudio E., 1999. "Taxes and income distribution in Chile: some unpleasant redistributive arithmetic," Journal of Development Economics, Elsevier, vol. 59(1), pages 155-192, June.
  3. Cropper, Maureen & Bhattacharya, Soma, 2007. "Public transport subsidies and affordability in Mumbai, India," Policy Research Working Paper Series 4395, The World Bank.
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Cited by:
  1. Javier Asensio & Andrés Gómez-Lobo & Anna Matas, 2013. "How effective are policies to reduce gasoline consumption? Evaluating a quasi-natural experiment in Spain," Working Papers 2013/9, Institut d'Economia de Barcelona (IEB).

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