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Does public transit use increase the economic efficiency of urban areas?


  • Drennan, Mathew

    () (University of California at Los Angeles)

  • Brecher, Charles

    () (New York University)


This paper explores the relationship between the scale of public transit services in urban areas of the U.S. and the efficiency of those economies, with efficiency measured by commercial office rents. Panel regressions are estimated in which real office rent is the left-hand variable. The key right-hand variable is per capita transit use. Other right-hand variables include demand for office space, office vacancy rate, average real wage and unemployment rate. Two-stage least squares equations are estimated to deal with possible simultaneity between office rents and transit use. Results indicate a positive relationship between public transit use and office rents. The relationship is stronger in areas with higher concentrations of office space in the central business district; however, the estimated dollar impact of transit use on office rents is small.

Suggested Citation

  • Drennan, Mathew & Brecher, Charles, 2012. "Does public transit use increase the economic efficiency of urban areas?," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 5(3), pages 53-67.
  • Handle: RePEc:ris:jtralu:0091

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    References listed on IDEAS

    1. Randall W. Eberts & Daniel P. McMillen, 1999. "Agglomeration Economies and Urban Public Infrastructure," Book chapters authored by Upjohn Institute researchers,in: Paul Cheshire & Edwin S. Mills (ed.), handbook or Regional and Urban Economics, volume 3, pages 1455-1495 W.E. Upjohn Institute for Employment Research.
    2. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
    3. Ghebreegziabiher Debrezion & Eric Pels & Piet Rietveld, 2007. "The Impact of Railway Stations on Residential and Commercial Property Value: A Meta-analysis," The Journal of Real Estate Finance and Economics, Springer, vol. 35(2), pages 161-180, August.
    4. Matthew P. Drennan & Hugh F. Kelly, 2011. "Measuring urban agglomeration economies with office rents," Journal of Economic Geography, Oxford University Press, vol. 11(3), pages 481-507, May.
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    More about this item


    public transit; urban; economies; efficiency;

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General


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