Are public transport improvements endogenous with respect to employment and income location in a city?

Carlos Olarte Bacares (carlos.olarte-bacares@reseau.sncf.fr)

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: Previous research has proved the existence of a causal relationship between the concentration of jobs in a city and the income of inhabitants. Other researchers have studied the close and nearly causal relationship between those variables and the infrastructure such as highways in different zones of a city. Nevertheless, no one study has taken into account the degree to which each area of a city benefits from the latest improvements to public transport. The aim of this research is to analyse the relationship between the size of the labour market, the income and the employment concentration with respect to improvements to public transport (Transmilenio) in Bogota. The degree of enhancement of public transport in a zone is suspected to be endogenous. Through the use of OLS estimations and then 2SLS, the validation of endogeneity provides sufficient tools to infer causality of improvement of public transport. The size of companies, defined by the number of jobs they offer, plays the role of instrumental variable. In essence, the number of jobs, the size of the labour market and income are largely defined by the level of improvement to urban public transport in each zone of the city but the causality relationship changes depending on the size of companies established in each zone. In the case of Bogota, public transport improvements seams to have a causality relationship with the income of inhabitants in each zone and the number of jobs, and this changes with respect to the size of enterprises. In contrast, the size of the labour market, defined as the number of jobs reachable in a specific time, is not determined by the degree of the presence of public transport enhancement.

Keywords: Causality; improvements of public transports; endogeneity; effective size of labor market; size of enterprises; Causalité; améliorations des transports publics; endogénéité; taille effective du marché du travail; taille des entreprises; Transmilenio (search for similar items in EconPapers)
Date: 2014-02
New Economics Papers: this item is included in nep-tre and nep-ure
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Published in 2014

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Working Paper: Are public transport improvements endogenous with respect to employment and income location in a city? (2014)
Working Paper: Are public transport improvements endogenous with respect to employment and income location in a city? (2014)
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