Work

The impact of fare reductions on public transportation use

Year: 2025

Type: article

Abstract: This paper empirically examines how consumers respond to reductions in public transportation fares by analyzing changes in their use of public transport. We exploit a policy that lowered fares across several municipalities in the metropolitan area of Barcelona. Our findings indicate a 39 percent increase in public transportation use during the year following the policy’s implementation. To assess whether the visibility of the policy shaped this response, we also examine the effects of the subsequent announcement of its financing scheme, nearly a year later. The announcement clarified that the fare reduction would be funded through a tax on homeowners. Once taxpayers became fully aware of both the fare reduction and its financing mechanism, their use of public transportation increased further, supporting the hypothesis that the visibility of public policies can shape individuals’ behavior regarding their use of public services. Finally, we estimate partial welfare effects, identifying both winners and losers.

Source: Economics of Transportation

DOI: 10.1016/j.ecotra.2025.100434

Authors: María Cervini-Plá, Mariona Tomàs, Javier Vázquez-Grenno

Institutions: Universitat Autònoma de Barcelona, Universitat de Barcelona, Barcelona Institute of Economics

Language: English

Topic: Transportation Planning and Optimization

Subfield: Transportation

Field: Social Sciences

Domain: Social Sciences

SDG: Sustainable cities and communities

Open Access status: hybrid

Estimated APC paid: $2,400