Rail infrastructure and road use: Causal evidence from the Gotthard base tunnel

The opening of the Gotthard Base Tunnel, the longest railway tunnel in the world, marked a milestone in Swiss transport policy. The tunnel, a part of the New Rail Link through the Alps, serves as a key instrument of the so-called ”modal shift policy,” which aims to transfer transalpine freight traffic from road to rail. The reduction in travel time by train between northern and southern Switzerland raised expectations that a substantial share of tourist-oriented passenger traffic would also shift from car to rail, thereby reducing transport-related CO2 emissions from tourism. In this paper, we conduct a causal analysis of the impact of the Gotthard Base Tunnel’s opening at the end of 2016 on the number of cars using the parallel Gotthard motorway section in the subsequent years. To this end, we apply the synthetic control and synthetic difference-in-differences methods to construct a synthetic Gotthard motorway section based on a weighted combination of other alpine road crossings (a so-called donor pool) that did not experience the construction of a competing rail infrastructure. In summary, our results reveal only a modest but statistically significant decline in the number of cars between the actual and the synthetic Gotthard motorway in the short run. Given the consistently strong and increasing demand for the new rail connection through the Gotthard Base Tunnel, we infer a substantial induced short-run demand effect resulting from the rail travel time savings.