Free rides to cleaner air? Examining the impact of massive public transport fare discounts on air quality

Daniel Albalate, Mattia Borsati and Albert Gragera

Economics of Transportation, 2024, vol. 40, issue C

Abstract: We quantify the effect of public transportation fare subsidies on air quality by exploiting the sharp discontinuity in the cost of ridership introduced by policy intervention. We identify this effect by taking advantage of four months of massive discounts for transit services introduced in Spain on September 1, 2022, as part of the national plan to tackle the global energy crisis. Across pollutants and specifications, we find no evidence that low-cost or free-of-charge public transportation financing schemes have improved air quality. Our results reveal that measures aimed at reducing transit prices may fail to achieve the claimed environmental benefits through a modal shift from private to collective modes of transport, which suggests that massive fare discounts may not represent an efficient allocation of public funds.

Keywords: Public transportation; Air quality; Externalities; Pollutants; Modal shift (search for similar items in EconPapers)
JEL-codes: L92 Q53 R41 R48 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecotra:v:40:y:2024:i:c:s221201222400039x

DOI: 10.1016/j.ecotra.2024.100380

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