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Subsidisation of public transport fares for the young: An impact evaluation analysis for the Madrid Metropolitan Area

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  • Arranz, José M.
  • Burguillo, Mercedes
  • Rubio, Jennifer

Abstract

This paper analyses the distributive and individual welfare implications on households of an urban demand transport policy with a high subsidisation of Public Transport (PT) fares for young users. This measure came into force in October 2015 in the Madrid Metropolitan Area. The fares of the travel-pass for young users were reduced by 56.8% on average, reaching up to 79.8% in the more distant peripheral areas. Moreover, the age of the beneficiaries was enlarged from 23 to 26 years old, for these few new beneficiaries the price was on average be reduced by 72.8%. Using data from the Spanish Households Budget Survey (HBS) for 2014 and 2016, we use impact evaluation techniques to measure the distributive effect of this transport policy. Results show first that households of medium and high-medium income levels are the main beneficiaries of this measure, which has increased their individual welfare because their PT expenditure has decreased by 42% and 49% respectively. Second, PT has become more accessible to the poorest households. Finally, there is no effect on the richest households and on the low-medium income level ones.

Suggested Citation

  • Arranz, José M. & Burguillo, Mercedes & Rubio, Jennifer, 2019. "Subsidisation of public transport fares for the young: An impact evaluation analysis for the Madrid Metropolitan Area," Transport Policy, Elsevier, vol. 74(C), pages 84-92.
    • Handle: RePEc:eee:trapol:v:74:y:2019:i:c:p:84-92
    DOI: 10.1016/j.tranpol.2018.11.008
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    1. Arranz, José M. & Burguillo, Mercedes & Rubio, Jeniffer, 2022. "Are public transport policies influencing the transport behaviour of older people and economic equity? A case study of the Madrid Region," Research in Transportation Economics, Elsevier, vol. 95(C).

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    More about this item

    Keywords

    Transport policy; Impact evaluation; Fare transport subsidies; Distributive effects; Households;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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