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Paratransit services and efficiency: The potential of utilizing idle taxis in a strained welfare market

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  • Hashimoto, Yuki

Abstract

With population aging, demand for paratransit services has increased, leading to higher operating subsidies. This study uses Japan as a case study to examine the substitutive relationship between subsidized noncommercial wheelchair-accessible vehicles (WAVs), primarily owned by elderly care facilities, and taxis, highlighting inefficiencies in the open-entry paratransit market. Using nationwide panel data, we find that a 10% increase in WAVs results in a 1.7% decrease in taxi revenue, reducing taxi drivers' income by approximately 5%. This effect is more pronounced in regions with higher aging rates and welfare spending. We suggest utilizing vacant taxis for paratransit services to enhance market efficiency.

Suggested Citation

  • Hashimoto, Yuki, 2024. "Paratransit services and efficiency: The potential of utilizing idle taxis in a strained welfare market," Research in Transportation Economics, Elsevier, vol. 108(C).
    • Handle: RePEc:eee:retrec:v:108:y:2024:i:c:s0739885924000842
    DOI: 10.1016/j.retrec.2024.101489
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    Keywords

    Paratransit; Taxi; Transportation policy; Elder care policy;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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