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Household spending on transport in Latin America and the Caribbean: A dimension of transport affordability in the region

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  • Gandelman, Néstor
  • Serebrisky, Tomás
  • Suárez-Alemán, Ancor

Abstract

In Latin America and the Caribbean (LAC), transportation constitutes one of the major items in the basket of good and services consumed by households. This paper describes household spending on transport in the region. Engel curves are estimated to understand the relationship between transport spending and changes in household income. Using income and expenditure surveys from 2003 to 2014 in 12 LAC countries – Bahamas, Bolivia, Brazil, Chile, Costa Rica, Ecuador, Honduras, Mexico, Nicaragua, Panama, Paraguay, and Uruguay – this paper finds a notable heterogeneity in transport spending in LAC. The results of the Engel curves lead to two simultaneous challenges, and the need to develop an urban transport strategy following a two-pronged approach. Low income population, that rely heavily on the use of public transport, face an affordability problem. Concurrently, the high-income elasticity of private transport, coupled with the growth of the middle class in the region, point to an ever-increasing private car ownership. On the public transport dimension, affordability should be addressed through demand side subsidies as they are known for minimizing errors of inclusion and avoiding supply side distortions. On the private transport dimension, the elasticities calculated suggest that fiscal policy instruments (taxes and charges) to pursue a desired outcome may not have the looked-for impact.

Suggested Citation

  • Gandelman, Néstor & Serebrisky, Tomás & Suárez-Alemán, Ancor, 2019. "Household spending on transport in Latin America and the Caribbean: A dimension of transport affordability in the region," Journal of Transport Geography, Elsevier, vol. 79(C), pages 1-1.
    • Handle: RePEc:eee:jotrge:v:79:y:2019:i:c:21
    DOI: 10.1016/j.jtrangeo.2019.102482
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    3. Christensen, Peter & Osman, Adam, 2021. "The Demand for Mobility: Evidence from an Experiment with Uber Riders," IZA Discussion Papers 14179, Institute of Labor Economics (IZA).
    4. Tiznado-Aitken, Ignacio & Lucas, Karen & Muñoz, Juan Carlos & Hurtubia, Ricardo, 2022. "Freedom of choice? Social and spatial disparities on combined housing and transport affordability," Transport Policy, Elsevier, vol. 122(C), pages 39-53.
    5. Daniel S. A. Carvalho & Gervásio F. Santos, 2022. "Transport and density of population groups in the urban area of the city of Salvador," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(6), pages 234-253, December.
    6. Baker, Dwayne Marshall & Kim, Seunghoon, 2020. "What remains? The influence of light rail transit on discretionary income," Journal of Transport Geography, Elsevier, vol. 85(C).
    7. Lebrand,Mathilde Sylvie Maria & Theophile,Ewane, 2022. "Rising Incomes, Transport Demand, and Sector Decarbonization," Policy Research Working Paper Series 10010, The World Bank.
    8. Valenzuela-Levi, Nicolás, 2021. "The rich and mobility: A new look into the impacts of income inequality on household transport expenditures," Transport Policy, Elsevier, vol. 100(C), pages 161-171.
    9. Seunghoon Kim, 2020. "The Social Justice Impact of the Transit-Oriented Development," Societies, MDPI, vol. 11(1), pages 1-19, December.

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    More about this item

    Keywords

    Transport spending; Household spending; Latin America and the Caribbean; Transport affordability;
    All these keywords.

    JEL classification:

    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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