The effect of transport policies on car use: A bundling model with applications

Francisco Gallego, Juan-Pablo Montero and Christian Salas

Energy Economics, 2013, vol. 40, issue S1, S85-S97

Abstract: Borrowing from the bundling literature, the paper presents a novel model of vertical and horizontal differentiation applied to transport decisions: households differ in their preferences for transportation modes — cars vs public transport — and in the amount of travel. Using few observables, the model is then used to interpret and compute policy costs associated to the effects of two major transport policies: the driving restriction program introduced in Mexico-City in November of 1989 and the public transport reform carried out in Santiago-Chile in February of 2007. Both policies had the unintended impact of increasing the number of cars on the road; and their associated transport costs are estimated, respectively, to be about 5% and 9% of the value of the vehicle stock at the time of implementation.

Keywords: Public transport; Driving restrictions; Pollution; Congestion (search for similar items in EconPapers)
JEL-codes: Q53 Q58 R41 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (45)

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Working Paper: The Effect of Transport Policies on Car Use: A Bundling Model with Applications (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:40:y:2013:i:s1:p:s85-s97

DOI: 10.1016/j.eneco.2013.09.018

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