Subways and Road Congestion

64 Pages Posted: 3 Jan 2019 Last revised: 9 Sep 2020

See all articles by Yizhen Gu

Yizhen Gu

Peking University HSBC Business School

Junfu Zhang

Clark University; IZA Institute of Labor Economics

Ben Zou

Michigan State University - Department of Economics

Date Written: Dec 19, 2019

Abstract

We study whether subways alleviate road congestion by examining 45 subway line launches in China and using detailed data on road speed. Our difference-in-differences estimation finds that in the first year after a subway line is launched, rush-hour speed on nearby roads increases by about 4%. The effect is most prominent in initially-congested roads and declines over distance to the new subway line. Evidence on road speed is corroborated with substitution patterns among modes of transportation. Using auxiliary data from Beijing, we calculate that the time savings for each automobile or bus commute from faster speed is worth 0.1 USD.

Keywords: subway, congestion, public transit

JEL Classification: R41, R42, L92

Suggested Citation

Gu, Yizhen and Zhang, Junfu and Zou, Ben, Subways and Road Congestion (Dec 19, 2019). Available at SSRN: https://ssrn.com/abstract=3304133 or http://dx.doi.org/10.2139/ssrn.3304133

Yizhen Gu

Peking University HSBC Business School ( email )

Junfu Zhang

Clark University ( email )

950 Main Street
Worcester, MA 01610
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ben Zou (Contact Author)

Michigan State University - Department of Economics ( email )

East Lansing, MI 48824
United States

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