Does the Substitutability of Public Transit Affect Commuters’ Response to Gasoline Price Changes?
This paper determines the extent to which gasoline price elasticity is affected by the availability of a substitute for driving—public transportation. Measuring the substitutability of public transportation presents an important practical difficulty. To address this, we predict individuals’ commute times by private and public transit conditional upon their observable characteristics and create a measure of substitutability between the two modes based on transit times. This allows us to measure the effect of public transportation on commuters’ sensitivity to gasoline prices. The interaction of gasoline price with our constructed substitutability measure is found to have a significant effect on annual vehicle miles traveled (VMT), indicating that investments in public transit could play an important role in altering motorists’ sensitivity to gasoline prices and increasing the effectiveness of a gasoline tax. However, we find evidence to support a policy of increasing public transit accessibility only in the presence of increased gasoline taxes.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antonio M Bento & Lawrence H Goulder & Emeric Henry & Mark R Jacobsen & Roger H. Von Haefen, 2005.
"Distributional and Efficiency Impacts of Gasoline Taxes: An Econometrically Based Multi-market Study,"
Sciences Po publications
info:hdl:2441/10084, Sciences Po.
- Antonio M. Bento & Lawrence H. Goulder & Emeric Henry & Mark R. Jacobsen & Roger H. von Haefen, 2005. "Distributional and Efficiency Impacts of Gasoline Taxes: An Econometrically Based Multi-market Study," American Economic Review, American Economic Association, vol. 95(2), pages 282-287, May.
- John Matthews & Geoffrey Turnbull, 2007. "Neighborhood Street Layout and Property Value: The Interaction of Accessibility and Land Use Mix," The Journal of Real Estate Finance and Economics, Springer, vol. 35(2), pages 111-141, August.
- Edward L. Glaeser & Joseph Gyourko & Raven E. Saks, 2005.
"Urban Growth and Housing Supply,"
NBER Working Papers
11097, National Bureau of Economic Research, Inc.
- Edward L. Glaeser & Joseph Gyourko & Raven E. Saks, 2005. "Urban Growth and Housing Supply," Harvard Institute of Economic Research Working Papers 2062, Harvard - Institute of Economic Research.
- Fabio Grazi & Jeroen C.J.M. van den Bergh & Jos N. van Ommeren, 2008.
"An Empirical Analysis of Urban Form, Transport, and Global Warming,"
The Energy Journal,
International Association for Energy Economics, vol. 0(Number 4), pages 97-122.
- F. Grazi & J.C.J.M. Van den Bergh & J.N. Van Ommeren, 2008. "An empirical analysis of urban form, transport, and global warming," Post-Print hal-00716717, HAL.
- Puller, Steven L. & Greening, Lorna A., 1999. "Household adjustment to gasoline price change: an analysis using 9 years of US survey data," Energy Economics, Elsevier, vol. 21(1), pages 37-52, February.
- Ian W.H. Parry & Kenneth A. Small, 2007.
"Should Urban Transit Subsidies Be Reduced?,"
060723, University of California-Irvine, Department of Economics.
- Bhat, Chandra R., 1997. "Work travel mode choice and number of non-work commute stops," Transportation Research Part B: Methodological, Elsevier, vol. 31(1), pages 41-54, February.
- Bhat, Chandra R. & Sardesai, Rupali, 2006. "The impact of stop-making and travel time reliability on commute mode choice," Transportation Research Part B: Methodological, Elsevier, vol. 40(9), pages 709-730, November.
- Sipes, Kristin N. & Mendelsohn, Robert, 2001. "The effectiveness of gasoline taxation to manage air pollution," Ecological Economics, Elsevier, vol. 36(2), pages 299-309, February.
- Thomas Klier & Joshua Linn, 2010. "The Price of Gasoline and New Vehicle Fuel Economy: Evidence from Monthly Sales Data," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 134-53, August.
- McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November.
- Katrin Dziekan, 2008. "What do people know about their public transport options?," Transportation, Springer, vol. 35(4), pages 519-538, July.
- Shanjun Li & Christopher Timmins & Roger H. von Haefen, 2009.
"How Do Gasoline Prices Affect Fleet Fuel Economy?,"
American Economic Journal: Economic Policy,
American Economic Association, vol. 1(2), pages 113-37, August.
- Train, Kenneth, 1980. "A Structured Logit Model of Auto Ownership and Mode Choice," Review of Economic Studies, Wiley Blackwell, vol. 47(2), pages 357-70, January.
- West, Sarah E. & Williams III, Roberton C., 2007. "Optimal taxation and cross-price effects on labor supply: Estimates of the optimal gas tax," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 593-617, April.
- Freedman, David A & Peters, Stephen C, 1984. "Bootstrapping an Econometric Model: Some Empirical Results," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(2), pages 150-58, April.
- Dahl, Carol A, 1979. "Consumer Adjustment to a Gasoline Tax," The Review of Economics and Statistics, MIT Press, vol. 61(3), pages 427-32, August.
- Sarah E. West & Roberton C. Williams III, 2005. "The Cost of Reducing Gasoline Consumption," American Economic Review, American Economic Association, vol. 95(2), pages 294-299, May.
- Yihsu Chen & Alexander Whalley, 2012. "Green Infrastructure: The Effects of Urban Rail Transit on Air Quality," American Economic Journal: Economic Policy, American Economic Association, vol. 4(1), pages 58-97, February.
- Jonathan Haughton & Soumodip Sarkar, 1996. "Gasoline Tax as a Corrective Tax: Estimates for the United States, 1970-1991," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 103-126.
- Qing Su & Joseph S. DeSalvo, 2008. "The Effect Of Transportation Subsidies On Urban Sprawl," Journal of Regional Science, Wiley Blackwell, vol. 48(3), pages 567-594.
When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-12-29. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster)
If references are entirely missing, you can add them using this form.