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Are public transport improvements endogenous with respect to employment and income location in a city?

  • Carlos Augusto Olarte Bacares

    ()

    (Axe Institutions - CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)

Previous research has proved the existence of a causal relationship between the concentration of jobs in a city and the income of inhabitants. Other researchers have studied the close and nearly causal relationship between those variables and the infrastructure such as highways in different zones of a city. Nevertheless, no one study has taken into account the degree to which each area of a city benefits from the latest improvements to public transport. The aim of this research is to analyse the relationship between the size of the labour market, the income and the employment concentration with respect to improvements to public transport (Transmilenio) in Bogota. The degree of enhancement of public transport in a zone is suspected to be endogenous. Through the use of OLS estimations and then 2SLS, the validation of endogeneity provides sufficient tools to infer causality of improvement of public transport. The size of companies, defined by the number of jobs they offer, plays the role of instrumental variable. In essence, the number of jobs, the size of the labour market and income are largely defined by the level of improvement to urban public transport in each zone of the city but the causality relationship changes depending on the size of companies established in each zone. In the case of Bogota, public transport improvements seams to have a causality relationship with the income of inhabitants in each zone and the number of jobs, and this changes with respect to the size of enterprises. In contrast, the size of the labour market, defined as the number of jobs reachable in a specific time, is not determined by the degree of the presence of public transport enhancement.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00973398.

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Date of creation: Feb 2014
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Handle: RePEc:hal:cesptp:halshs-00973398
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  1. Paul Krugman, 1997. "Development, Geography, and Economic Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 026261135x, June.
  2. Attanasi, Giuseppe & Casoria, Fortuna & Centorrino, Samuele & Urso, Giulia, 2013. "Cultural investment, local development and instantaneous social capital: A case study of a gathering festival in the South of Italy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 228-247.
  3. Ihlanfeldt, Keith R. & Sjoquist, David L., 1991. "The role of space in determining the occupations of black and white workers," Regional Science and Urban Economics, Elsevier, vol. 21(2), pages 295-315, July.
  4. Gérard Koenig, 1974. "Théorie économique de l'accessibilité urbaine," Revue Économique, Programme National Persée, vol. 25(2), pages 275-297.
  5. Mizuki Kawabata, 2003. "Job access and employment among low-skilled autoless workers in US metropolitan areas," Environment and Planning A, Pion Ltd, London, vol. 35(9), pages 1651-1668, September.
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