In July, I started taking a look at the economics of public transport fare policies. In the first part of the series, I took a look at how traffic congestion can be a rationale for public transport fare subsidies. (Parts 2 and 3 dealt with different issues.) I observed that:
In the absence of congestion pricing (and in the presence of other subsidies for driving, such as minimum parking requirements), higher public transport fares can result in a perverse outcome – additional congestion and delays for existing road drivers. This is shown in the following diagram:
Effectively, a failure to price roads efficiently means that we have to provide subsidies for public transport to prevent car commutes from being even more painful than they currently are.
But how much congestion reduction can we attribute to public transport? How much slower would car commutes be if some people weren’t travelling by PT instead of clogging up the roads? And how much is that worth to us?
It’s not possible to test this experimentally – we can’t exactly build a bunch of cities that are identical except for their PT systems and see what happens. (Transport research budgets are not nearly large enough.) However, we can observe the outcomes from various “natural experiments” that disrupt public transport systems while leaving everything else unchanged, such as natural disasters and public transport strikes.
Stu Donovan pointed me towards a recent research paper that analysed traffic speeds during public transport strikes in the Dutch city of Rotterdam. The authors, Martin Adler and Jos van Ommeren, use detailed traffic flow and speed data to model how 13 PT strikes that occurred from 2001 to 2011 affected traffic speeds. Because strikes prevent people from using PT without impeding road traffic, the outcomes observed during strikes give us some indication of what would happen to congestion in the absence of PT.
If you’re interested in knowing a bit more about the topic or the methodology, I highly recommend you read the paper. (It’s an excellent paper!) Here, I’d like to focus on a few key findings from the analysis.
First, the authors found that PT helps to speed up car journeys by reducing the number of people driving:
We demonstrate that during a citywide strike, car speed within the city decreases by about 10%. For highways, strikes exhibit a much smaller speed reduction of about 3%. During rush hours, the reduction in speed is more pronounced. These results imply that during rush hours, public transit provision reduces car travel time on inner city roads by about 0.2 minutes per kilometer travelled, whereas it reduces car travel time on highways by 0.02 minutes per kilometer. Hence, for cities such as Rotterdam, travelers on inner city roads benefit much more from public transit provision than highway travelers.
Intuitively, these results make sense. The benefits of PT for drivers are much higher in busier areas, such as Rotterdam’s inner city roads. However, Rotterdam’s ring road highways still derive some benefits.
The second interesting finding is that the popularity and ease of cycling in Rotterdam – even though it’s not exactly leading by Dutch standards – cushioned against some of the negative impacts of PT strikes:
a full-day citywide strike increases bicycle flow by 24% implying that a large share of travelers switch to bicycle use (rather than car use), which presumably reduces the car flow increase and therefore the speed reduction of a strike. Bicycle ownership and use is much higher in the Netherlands than in other countries in the world, so this result is likely specific to the Netherlands.
In other words, the availability of multiple congestion-free networks – public transport and cycling – meant that the roads didn’t have to accommodate all of the people who couldn’t get on the bus on strike days. In other words, the availability of multiple transport choices enhanced network resilience.
Third, the authors calculated the value of congestion reduction benefits attributable to public transport in Rotterdam. Based on some plausible assumptions about journey lengths and the value of time, they estimate that:
The annual public transit congestion relief benefit is then about €95 million (assuming 252 working days), so about €79 per inhabitant. This excludes any benefits of public transit provision on weekends that we assume to be negligible, so this is likely an underestimate. Given 721 million public transit passenger kilometers (OVPRO, 2014), the congestion reduction benefit per public transit kilometer is €0.13. This benefit is substantial given that the cost per public transit kilometer is €0.46.
In addition to congestion welfare losses there are rescheduling costs to car travelers. [Note: only 55% of the reduction in PT trips on strike days was balanced out by the increase in car and bicycle trips, meaning that a large share of people chose not to travel.] We do not include these costs, nor do we include the loss to public transit ticket holders or any other external cost of car driving that are likely an order of magnitude smaller than the effect through congestion.
The costs of providing public transit in Rotterdam are partially covered by subsidies, about €0.28 per public transit kilometer. So, the congestion relief benefit is about 47% of subsidies.
This is a really interesting finding! It puts a monetary figure on the congestion relief delivered by PT. (For Rotterdam, at least.) And, interestingly, it’s a large enough figure to justify a good proportion of PT fare subsidies. There are also other rationales for fare subsidies that I haven’t discussed here, such as social equity for people without cars and various types of network effects in PT provision.
But even if we leave those aside, this finding suggests that drivers should be happy to spend some fuel tax revenues to subsidise public transport.
What do you think about congestion and public transport?