Does Public Transit Reduce Car Travel Externalities?

Tinbergen Institute Discussion Paper 15-011/VIII

29 Pages Posted: 23 Jan 2015

See all articles by Martin Adler

Martin Adler

VU University Amsterdam

Jos N. van Ommeren

Vrije Universiteit Amsterdam, School of Business and Economics; Tinbergen Institute

Date Written: January 20, 2015


One of the main unanswered questions in the field of urban economics is to which extent subsidies to public transit are justified. We examine one of the main benefits of public transit, a reduction in car congestion externalities, the so-called congestion relief benefit, using quasi-natural experimental data on citywide public transit strikes for Rotterdam. On weekdays, a strike induces car speed to decrease only marginally on the highway ring road (by 3 percent) but substantially on inner city roads (by 10 percent). During rush hour, the strike effect is much more pronounced. The congestion relief benefit is substantial, equivalent to about half of the public transit subsidy. We demonstrate that during weekends, car speed does not change noticeable due to strikes. Further, we show that public transit strikes induce similar increases in number of cyclists as number of car travelers suggesting that bicycling-promoting policies to reduce car congestion externalities might be attractive.

Keywords: transit subsidies, public transit, traffic congestion, congestion relief benefit, strike

JEL Classification: H76, J52, L92, R41

Suggested Citation

Adler, Martin and van Ommeren, Jos N., Does Public Transit Reduce Car Travel Externalities? (January 20, 2015). Tinbergen Institute Discussion Paper 15-011/VIII, Available at SSRN: or

Martin Adler (Contact Author)

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV

Jos N. Van Ommeren

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS

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