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Travel mode substitution in Sao Paulo : estimates and implications for air pollution control


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  • Swait, Joffre
  • Eskeland, Gunnar S.


How would travel demand in Sao Paulo respond to demand management instruments? Could higher gasoline prices or lower metro fares (or changes in travel time) help reduce congestion or pollution? The authors use cross-sectional variation from an urban travel survey to study the substitutability in demand between travel modes. The method assumes that the set of trips is given (that is, origin-destination pairs do not change). Choice of mode was found to be quite insensitive to changes; all elasticities were lower than 0.5 in absolute value, and most were close to zero. While the sensitivity of mode choice to relative travel times (that is, speeds) was somewhat greater than that to costs, the general finding is that mode choice is quite inflexible. So, subsidies to less polluting (less congesting) travel modes would not help much in attracting travelers from more polluting (more congesting) modes. (The same holds for subsidized means of making them run faster.) But there are important limitations in the scope of the study. First, the study does not discuss optimal pricing. It merely examines the likely sign and magnitude of the links between pollution and policy parameters such as prices and travel speeds. Second, aggregate demand by mode could also depend on the city's shape and its travel intensity (the number, direction, and length of trips). For example, if a"city"stretches along a constructed metro line, the study would not capture such a phenomenon, since sensitive trip generation is excluded. These issues are not examined in the study.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1437.

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Date of creation: 31 Mar 1995
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Handle: RePEc:wbk:wbrwps:1437

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Keywords: Roads&Highways; Consumption; Economic Theory&Research; Environmental Economics&Policies; Transport Economics Policy&Planning; Roads&Highways; Economic Theory&Research; Urban Transport; Environmental Economics&Policies; Transport and Environment;


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  1. Robert S. Pindyck, 1979. "The Structure of World Energy Demand," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661772, December.
  2. Krupnick, Alan J., 1992. "Measuring the effects of urban transportation policies on the environment : a survey of models," Policy Research Working Paper Series 1030, The World Bank.
  3. Tae H. Oum & Waters, W.G. & Jong Say Yong, 1990. "A survey of recent estimates of price elasticities of demand for transport," Policy Research Working Paper Series 359, The World Bank.
  4. Gilbert, Carol C. S., 1992. "A duration model of automobile ownership," Transportation Research Part B: Methodological, Elsevier, vol. 26(2), pages 97-114, April.
  5. Eskeland, Gunnar S. & Feyzioglu, Tarhan N., 1997. "Is demand for polluting goods manageable? An econometric study of car ownership and use in Mexico," Journal of Development Economics, Elsevier, vol. 53(2), pages 423-445, August.
  6. Golob, Thomas F., 1990. "The Dynamics of Household Travel Time Expenditures and Car Ownership Decisions," University of California Transportation Center, Working Papers qt2t18b4q9, University of California Transportation Center.
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Cited by:
  1. Alpizar, Francisco & Carlsson, Fredrik, 2001. "Policy Implications and Analysis of the Determinants of Travel Mode Choice: An Application of Choice Experiments to Metropolitan Costa Rica," Working Papers in Economics 56, University of Gothenburg, Department of Economics.
  2. Hentschel, Jesko, 2004. "Using rapid city surveys to inform municipal social policy : an application in Cali, Colombia," Policy Research Working Paper Series 3369, The World Bank.


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