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Is the Mexico City metro an inferior good?

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  • Crôtte, Amado
  • Noland, Robert B.
  • Graham, Daniel J.

Abstract

Time series cointegration techniques are used to estimate whether the Mexico City metro is perceived as a normal or inferior good. Owing to the fact that the Mexico City metro mainly serves the low income sectors of the population, this paper attempts to separate the overall income effect into two uncorrelated components: a vehicle stock effect (used as a proxy for medium/high income) and minimum wage effect net of the influence of vehicle stock (used as a proxy for low income). The time series cointegration results show that minimum wage elasticities are positive whilst vehicle stock elasticities are negative. These results suggest that for the majority of metro users, whose salaries are based on low multiples of the minimum wage and are not potential car owners, the Mexico City metro is perceived as a normal good. However, for middle/high income earners, who can afford to buy a private vehicle when their incomes increase, the Mexico City metro is perceived as an inferior good.

Suggested Citation

  • Crôtte, Amado & Noland, Robert B. & Graham, Daniel J., 2009. "Is the Mexico City metro an inferior good?," Transport Policy, Elsevier, vol. 16(1), pages 40-45, January.
    • Handle: RePEc:eee:trapol:v:16:y:2009:i:1:p:40-45
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    3. Atuesta, Laura H. & Ibarra-Olivo, J. Eduardo & Lozano-Gracia, Nancy & Deichmann, Uwe, 2018. "Access to employment and property values in Mexico," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 142-154.
    4. Youzhi Zeng & Bin Ran & Ning Zhang & Xiaobao Yang, 2021. "Estimating the Price Elasticity of Train Travel Demand and Its Variation Rules and Application in Energy Used and CO 2 Emissions," Sustainability, MDPI, vol. 13(2), pages 1-19, January.
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    6. Zhang, Jianhua & Zhao, Mingwei & Liu, Haikuan & Xu, Xiaoming, 2013. "Networked characteristics of the urban rail transit networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(6), pages 1538-1546.
    7. Zhang, Jianhua & Wang, Shuliang & Wang, Xiaoyuan, 2018. "Comparison analysis on vulnerability of metro networks based on complex network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 496(C), pages 72-78.
    8. Germà Bel & Maximilian Holst, 2015. "“Evaluation of the Impact of Bus Rapid Transit on Air Pollution”," IREA Working Papers 201519, University of Barcelona, Research Institute of Applied Economics, revised Sep 2015.
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    10. Guerra, Erick, 2014. "Mexico City's suburban land use and transit connection: The effects of the Line B Metro expansion," Transport Policy, Elsevier, vol. 32(C), pages 105-114.

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