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Free rides to cleaner air? Examining the impact of massive public transport fare discounts on air quality

Author

Listed:
  • Daniel Albalate

    (Dept. of Econometrics, Statistics and Applied Economics, Universitat de Barcelona, Spain.)

  • Mattia Borsati

    (Dept. of Econometrics, Statistics and Applied Economics, Universitat de Barcelona, Spain.)

  • Albert Gragera

    (Dept. of Applied Economics, Autonomous University of Barcelona, Spain.)

Abstract

We quantify the effect of public transportation fare subsidies on air quality by exploiting the sharp discontinuity in the cost of ridership introduced by policy intervention. We identify this effect by taking advantage of four months of massive discounts for transit services introduced in Spain on September 1, 2022, as part of the national plan to tackle the global energy crisis. Across pollutants and specifications, we find no evidence that low-cost or free-of-charge public transportation financing schemes have improved air quality. Our results reveal that measures aimed at reducing transit prices may fail to achieve the claimed environmental benefits through a modal shift from private to collective modes of transport, which suggests that massive fare discounts may not represent an efficient allocation of public funds.

Suggested Citation

  • Daniel Albalate & Mattia Borsati & Albert Gragera, 2024. "Free rides to cleaner air? Examining the impact of massive public transport fare discounts on air quality," IREA Working Papers 202414, University of Barcelona, Research Institute of Applied Economics, revised Feb 2024.
    • Handle: RePEc:ira:wpaper:202414
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    File URL: http://www.ub.edu/irea/working_papers/2024/202414.pdf
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    More about this item

    Keywords

    Public transportation; Air quality; Externalities; Pollutants; Modal shift. JEL classification: L92; Q53; R41; R48.;
    All these keywords.

    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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