SMU SOE Seminar Series (February 28, 2025): Who Benefits from Faster Public Transit?

TOPIC:

ABSTRACT

Fast public transit networks are widely believed to (i) attract more riders and reduce negative externalities of driving, and (ii) reduce inequality by improving mobility for the urban poor. But are the transit improvements that are most effective at increasing transit ridership also more equitable? Combining survey data with web-scraped counterfactual travel times for millions of trips across 49 large US cities, I estimate a model of travel mode and residential location choice. I characterize the heterogeneity across income groups and cities in commuters’ marginal willingness to pay for access to faster transit and to increase their transit ridership. I find that higher-income transit riders sort more aggressively into the fastest transit routes and are, on average, willing to pay more for faster commutes. Improvements in transit speed are most effective at generating transit ridership and welfare gains where transit is already fast (relative to driving), in cities with a greater share of rail-based transit and where the gains are larger for higher income commuters. Transit improvements benefit lower-income commuters more where transit is relatively slow, in cities with more bus transit, and where the overall marginal gains are small.

Keywords: Travel Mode Choice,  Residential Location Choice, Mass Transit, Public Transportation, Income Sorting.

JEL: R23, R41.

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