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The Effect of Public Transport Pricing Policy: Experimental Evidence

Author

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  • Philippe Gagnepain

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Sébastien Massoni

    (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Alexandre Mayol

    (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Carine Staropoli

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

We investigate the impact of different public transport pricing schemes on daily commuting habits. Psychological inertia, car stickiness, complexity aversion, or skewed perception of prices are expected to influence decisions. We build a controlled experiment, where participants make transport decisions and face various public transport tariffs. Our findings indicate that players are rational as they reach the Nash predictions of our model, but cognitive biases inherent to users are also present. Peak/off-peak and two-part tariffs prove to be more successful in encouraging public transit use than flat fare subscriptions, possibly due to a preference for flexibility and the ability to take past experiences into account (congestion and incident) in future travel choices. Thus, this paper suggests that well designed pricing strategies are useful tools to promote public transit use and reduce road congestion.

Suggested Citation

  • Philippe Gagnepain & Sébastien Massoni & Alexandre Mayol & Carine Staropoli, 2024. "The Effect of Public Transport Pricing Policy: Experimental Evidence," Working Papers halshs-04607716, HAL.
    • Handle: RePEc:hal:wpaper:halshs-04607716
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04607716v1
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    2. Albalate, Daniel & Borsati, Mattia & Gragera, Albert, 2024. "Free rides to cleaner air? Examining the impact of massive public transport fare discounts on air quality," Economics of Transportation, Elsevier, vol. 40(C).

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