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End of the Line: The Effects of Large Passenger Rail Cuts on Local Economic Outcomes

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  • Jeff Chan

Abstract

In this paper, I study the effects of cuts to passenger rail service on affected communities by using a large, sudden, and unanticipated reduction in service provision in 1990 by the national rail service provider in Canada (VIA Rail) as a natural experiment. I employ train schedules before and after the cuts matched with census data from 1981 to 1996. Consistent with rail usage only accounting for 1 percent of domestic trips prior to the cuts, I do not find consistent evidence that losing passenger rail service adversely affected local socio-demographic, economic, and mobility outcomes. Estimated effects have mixed signs and are largely statistically insignificant. Results from various robustness analyses align with the overall picture. My results therefore suggest caution in applying the findings from other studies that increased passenger rail access improves local outcomes in other countries to other contexts such as Canada.

Suggested Citation

  • Jeff Chan, 2024. "End of the Line: The Effects of Large Passenger Rail Cuts on Local Economic Outcomes," Canadian Public Policy, University of Toronto Press, vol. 50(4), pages 422-439, December.
    • Handle: RePEc:cpp:issued:v:50:y:2024:i:4:p:422-439
    DOI: 10.3138/cpp.2024-036
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    More about this item

    Keywords

    government funding; local economic development; passenger rail; public goods provision; VIA Rail;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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