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Does the Substitutability of Public Transit Affect Commuters’ Response to Gasoline Price Changes?

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  • Spiller, Elisheba

    (Resources for the Future)

  • Stephens, Heather M.
  • Timmins, Christopher
  • Smith, Allison

Abstract

This paper determines the extent to which gasoline price elasticity is affected by the availability of a substitute for driving—public transportation. Measuring the substitutability of public transportation presents an important practical difficulty. To address this, we predict individuals’ commute times by private and public transit conditional upon their observable characteristics and create a measure of substitutability between the two modes based on transit times. This allows us to measure the effect of public transportation on commuters’ sensitivity to gasoline prices. The interaction of gasoline price with our constructed substitutability measure is found to have a significant effect on annual vehicle miles traveled (VMT), indicating that investments in public transit could play an important role in altering motorists’ sensitivity to gasoline prices and increasing the effectiveness of a gasoline tax. However, we find evidence to support a policy of increasing public transit accessibility only in the presence of increased gasoline taxes.

Suggested Citation

  • Spiller, Elisheba & Stephens, Heather M. & Timmins, Christopher & Smith, Allison, 2012. "Does the Substitutability of Public Transit Affect Commuters’ Response to Gasoline Price Changes?," RFF Working Paper Series dp-12-29, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-12-29
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-12-29.pdf
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    References listed on IDEAS

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    Cited by:

    1. Boarnet, Marlon G. & Hsu, Hsin-Ping, 2015. "The gender gap in non-work travel: The relative roles of income earning potential and land use," Journal of Urban Economics, Elsevier, vol. 86(C), pages 111-127.
    2. Hamilton, Timothy L. & Wichman, Casey J., 2018. "Bicycle infrastructure and traffic congestion: Evidence from DC's Capital Bikeshare," Journal of Environmental Economics and Management, Elsevier, vol. 87(C), pages 72-93.
    3. Bento, Antonio M. & Hughes, Jonathan E. & Kaffine, Daniel, 2013. "Carpooling and driver responses to fuel price changes: Evidence from traffic flows in Los Angeles," Journal of Urban Economics, Elsevier, vol. 77(C), pages 41-56.
    4. Spiller, Elisheba & Stephens, Heather M., 2012. "The Heterogeneous Effects of Gasoline Taxes: Why Where We Live Matters," RFF Working Paper Series dp-12-30, Resources for the Future.

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    More about this item

    Keywords

    public transportation; elasticity; commuting; gasoline prices;
    All these keywords.

    JEL classification:

    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • H0 - Public Economics - - General

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