Congestion Externalities of Public Transit

14:00-15:30, Monday, July 13, 2020

Tencent Meeting

Dr. Yizhen GU, is now an associate professor of Institute for Economic Social Research, Jinan University. Dr. GU obtained his Ph.D. in Economics from University of California, Berkeley in 2015. His research interests are Urban Economics and Transportation Economics. His works have appeared in American Economic Journal: Applied Economics, American Economic Review: Insights, Review of Economics and Statistics, Journal of Urban Economics, among others.

Traffic congestion is a salient feature and a major disamenity in urban life, yet it is difficult to quantify due to data and measurement limitations. This paper uses the universe of detailed trip records using Beijing's public transit in selected weeks between 2014 and 2017 and estimates three sources of congestion externalities in urban trips: (1) the congestion externality onboard a bus; (2) that in the subway system; (3) and the congestion externality of buses on road speed. We find that within-bus and within-subway congestion externalities are modest, while buses impose a large negative externality on other road vehicles. Congestion externalities are in general much larger during rush hours. We build a simple model of demand for urban trips where these externalities serve as sufficient statistics. We calculate optimal transit fare schedule and congestion tax and compare them to Beijing's current transportation policies.

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