Do Public Transit Investments Promote Urban Economic Development? Evidence from Bogotá, Colombia

In this paper, the authors use a repeated cross-section labor market dataset to assess whether access to the TransMilenio Bus Rapid Transit (BRT) system in Bogotá, Colombia, affects the incomes of those who live in station area neighborhoods. Results indicate that the opening of the system was associated with increased income for those living near – but not immediately adjacent to – trunk line stations. This relationship is strongest in the lower and middle-income range. Two possible explanations for this result are that existing residents earn higher wages, or higher income workers relocate to the neighborhood. While available data do not allow the authors to distinguish clearly between these two causes, evidence suggests that much of the effect is likely due to relocation. The results stand in contrast to prior work, which has largely suggested that improvements in public transit will tend to reduce wages in station areas.