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Affordability of Public Transport A Methodological Clarification

  • Andrés Gómez-Lobo

There has been a surge of interest recently on the relation between poverty and transport policies. When analysing the relation between poverty and transport, concern often centres on the affordability of public transport. In this paper we present two alternative definitions of affordability used in the transport literature and discuss their limitations. Any affordability measure covering only transport expenditure is bound to be a very partial view of household welfare. In addition, the required affordability benchmark to determine whether or not transport costs are high is arbitrary. Therefore, the approach that uses the absolute level of these affordability measures is meaningless. We also show in this paper that the change in the affordability measures, as opposed to its absolute level, can be given a more rigorous interpretation in terms of traditional welfare economics. In spite of this last result, we argue that to analyse whether transport subsidies are meeting their social or distributional objectives it may be more fruitful to use traditional income distributional tools such as the relative benefit curve and its associated Gini coefficient. © 2011 LSE and the University of Bath

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Article provided by London School of Economics and University of Bath in its journal Journal of Transport Economics and Policy (JTEP).

Volume (Year): 45 (2011)
Issue (Month): 3 (September)
Pages: 437-456

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Handle: RePEc:tpe:jtecpo:v:45:y:2011:i:3:p:437-456
Contact details of provider: Web page: http://www.bath.ac.uk/e-journals/jtep

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  1. World Bank, 2002. "Cities on the Move : A World Bank Urban Transport Strategy Review," World Bank Publications, The World Bank, number 15232, June.
  2. Banks, James & Blundell, Richard & Lewbel, Arthur, 1996. "Tax Reform and Welfare Measurement: Do We Need Demand System Estimation?," Economic Journal, Royal Economic Society, vol. 106(438), pages 1227-41, September.
  3. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  4. Cropper, Maureen & Bhattacharya, Soma, 2007. "Public transport subsidies and affordability in Mumbai, India," Policy Research Working Paper Series 4395, The World Bank.
  5. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, vol. 39(3), pages 377-391, August.
  6. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
  7. Muellbauer, John, 1975. "Aggregation, Income Distribution and Consumer Demand," Review of Economic Studies, Wiley Blackwell, vol. 42(4), pages 525-43, October.
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