EconPapers    
Economics at your fingertips  
 

The new public transport pricing in Madrid Metropolitan Area: A welfare analysis

Mercedes Burguillo, Romero-Jordán, Desiderio and Sanz-Sanz, José Félix

Research in Transportation Economics, 2017, vol. 62, issue C, 25-36

Abstract: In a context of economic crisis, the amount of the demand public transport subsidies in Madrid has been reduced to control the level of public deficit. This has implied a worsening of public service quality and an increase of public transport prices. Using the Spanish Household Survey, this paper analyses the impact on welfare generated by the increase of public transport prices in 2008–2012. For this price and income elasticities have been computed using an LA/AIDS model. Price public transport elasticities are low (around −0.1%) and only significant for the years of the highest price increase. Fuel is substitutive for public transport with a cross-price elasticity of 0.25% and the other goods consumption is almost independent of the consumption of public transport with a cross-price elasticity of 0.06%. The results of income elasticies prove that public transport is a normal good. Results show that this new policy has harmed with a similar impact, low and medium income households. Those households have supported an average loss of welfare of 3.66% of their income. The welfare loss supported by the richest households is 1.5% of their income, which represents only a 40% of the average costs supported by the rest of households.

Keywords: Public transport; Welfare; Pricing policy; Household; Urban transport; LA/AIDS models (search for similar items in EconPapers)
JEL-codes: H20 H71 R21 R28 R48 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0739885917300264
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:retrec:v:62:y:2017:i:c:p:25-36

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_2&version=01

Access Statistics for this article

Research in Transportation Economics is currently edited by M. Dresner

More articles in Research in Transportation Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-06-04
Handle: RePEc:eee:retrec:v:62:y:2017:i:c:p:25-36