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Does public transit reduce car travel externalities? Quasi-natural experiments' evidence from transit strikes

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  • Adler, Martin W.
  • van Ommeren, Jos N.

Abstract

One of the unanswered questions in the field of urban economics is to which extent subsidies to public transit are justified. We examine one of the main benefits of public transit, a reduction in car congestion externalities, the so-called congestion relief benefit, using quasi-natural experimental data on citywide public transit strikes for Rotterdam, a city with mild congestion levels. On weekdays, a strike induces travel times to increase only marginally on the highway ring road (0.017min/km) but substantially on inner city roads (0.224min/km). During rush hour, the strike effect is much more pronounced. The congestion relief benefit of public transit is substantial, equivalent to about 80% of the public transit subsidy. We demonstrate that during weekends, travel time does not change noticeably due to strikes. Furthermore, we show that public transit strikes induce similar increases in number of cyclists as number of car travelers suggesting that bicycling-promoting policies to reduce car congestion externalities might be attractive in combination with first-best congestion pricing.

Suggested Citation

  • Adler, Martin W. & van Ommeren, Jos N., 2016. "Does public transit reduce car travel externalities? Quasi-natural experiments' evidence from transit strikes," Journal of Urban Economics, Elsevier, vol. 92(C), pages 106-119.
    • Handle: RePEc:eee:juecon:v:92:y:2016:i:c:p:106-119
    DOI: 10.1016/j.jue.2016.01.001
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    More about this item

    Keywords

    Transit subsidies; Public transit; Traffic congestion; Congestion relief benefit; Strike;
    All these keywords.

    JEL classification:

    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • 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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