Economics at your fingertips  

Is taxation being effectively used to promote public transport in Europe?

Victor Barros, Carlos Oliveira Cruz, Tomás Júdice and Joaquim Miranda Sarmento

Transport Policy, 2021, vol. 114, issue C, 215-224

Abstract: Public transport is a pivotal utility in increasing the long-term sustainability of cities. Consequently, there has been a growing interest in promoting a sustainable modal shift that reduces dependence on private vehicle use. This strategy has involved several specific actions, among them employing price differentiation between the two substitutes considered in this research – public transport and private cars. Governments can influence fares in different ways. However, fiscal policy governing applicable taxes is one that is often neglected in the literature. This paper investigates the relationship between the market share of public transport and taxation – in particular, value added tax (VAT), which is levied on three main products: public transport fares, fuel, and vehicle ownership. The results show that taxes matter, but not all taxes are determinant. A lower VAT rate on public transport fares and a higher tax rate on vehicle ownership can lead to an increase in public transport's market share. Taxing car utilization through VAT on fuel does appear to be significant.

Keywords: Ridership; Taxes; Public transport; Value added tax (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
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:

Ordering information: This journal article can be ordered from
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.tranpol.2021.10.003

Access Statistics for this article

Transport Policy is currently edited by Y. Hayashi

More articles in Transport Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2024-02-12
Handle: RePEc:eee:trapol:v:114:y:2021:i:c:p:215-224