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Effects of Urban Rail Transit Expansions:
Evidence from Sixteen Cities, 1970–2000
Matthew E. Kahn
Federal, state, and local governments have spent more than $25 billion to establish or expand rail transit infrastructure in sixteen major U.S. metropolitan areas between 1970 and 2000. Billions more have been invested to maintain and improve existing rail transit lines. Despite the significant infrastructure improvements associated with these investments, transit ridership has been declining rapidly. The fraction of metropolitan area commuters in the United States using public transit declined from 0.12 in 1970 to 0.06 in 2000. Furthermore, only in a few metropolitan areas has transit increased its share of the commuting market since 1970, and in none of these areas did transit garner more than 10 percent of the market in 2000.
In this paper, we evaluate the extent to which rail transit improvements have spurred new ridership and we provide some rough estimates of the value of these new commuting options. We demonstrate the importance of considering heterogeneous responses of commuting mode choice both within and between metropolitan areas to the existence of new rail lines. For example, in each metropolitan area except Chicago, commuters living beyond ten kilometers of the city center and within two kilometers of a new rail transit line increased their transit use between 1970 and 2000. However, most metropolitan areas saw declines in ridership within ten kilometers of the city center in areas near and far from new rail lines alike. Variation in metropolitan area [End Page 147] structure is also key in determining whether new rail lines succeed at attracting riders. Rail transit is more likely to be successful in more densely populated and centralized cities. Of the sixteen cities that significantly expanded their rail infrastructure after 1970, we find that Washington stands out as a place where rail transit investments have had relatively high returns. Finally, we find little evidence that significant ridership gains due to new rail lines continue to accrue more than a few years after construction is completed.
Panel data at the census tract level allow us to evaluate the effects on ridership of new rail lines by making two types of comparisons. Exploitation of within metropolitan area variation in access allows for comparison of areas of each city that received new rail transit to equivalent areas that did not. Time series variation in transit access allows for comparison of the same census tract in each city over time. This difference-in-difference type comparison ultimately identifies our estimates of ridership gains as a result of new rail transit. Census data on commuting times and the number of rail, bus, and car commuters allow us to roughly calculate the number of commuting hours saved as a result of new rail transit construction.
We develop a simple theoretical model that provides intuition about the spatial patterns in commuting mode choice adjustments that one may expect to see as a result of new rail transit infrastructure. The implications of the model motivate the specifications used in public transit use regressions. These regressions incorporate potentially heterogeneous responses of public transit use to new rail infrastructure as a function of the year the system was built, distance to the city center, and physical structure of the metropolitan area as a whole. These regressions form the core empirical contribution of this paper. We use the regression estimates to evaluate the extent to which new rail transit causes people to change commuting modes, allowing us to roughly quantify the welfare benefits of recently constructed rail lines and to make some predictions about the likely success or failure of rail transit construction projects currently under way in several U.S. cities.
Our study builds on earlier research investigating the consequences of rail transit investments. In a previous paper, we document that transit ridership saw less than average declines near new rail lines constructed in five U.S. cities...