How unequal are travel costs? Evidence from the Paris Region

This paper studies the distribution of transport costs borne by the Paris region households and the issues of vertical (income) and horizontal (location) equity. Using the 2018 household travel survey, we estimate the following costs: monetary costs, time costs, air pollution costs (distinguishing between the cost caused and borne by the household) and CO2 emission costs. We study the distribution of each dimension alone, as well as the relationship between them. Results show that monetary costs are regressive and represent the most unequal distributed dimension across income groups and space, with the lowest quartiles living in the outer suburbs (those car dependent) facing the highest effort ratios. Time costs are randomly spread across space, but do increase with income. Pollution costs are the lowest for households living in the outer suburbs, and are almost equal across income quartiles. We do find evidence of (slight) compensation between the various costs as the total private cost – the sum of monetary, time and pollution costs – has a lower Gini index than each cost alone. Time costs contribute the most (around 75%) to private cost inequalities due to their large cost share, while monetary costs contribute to around 25%. Our findings stress the importance of considering 1) both horizontal and vertical equity in policy design as both issues are empirically significant, and 2) all the main cost dimensions (money, time, and environment), and not just only one as it is often the case, as the various costs may (or may not) compensate each other.