Net effects of gasoline price changes on transit ridership in U.S. urban areas.

PDFTech ReportCA-MTI-14-1106MTI Report 12-19DTRT12-G-UTC21Urban areasGasolinePricesRidershipField testsRegression analysisBus transitRailroad commuter serviceLight rail transitPublic transitElasticity (Economics)United StatesMineta Transportation InstituteIseki, HiroyukiAli, RubabaMineta Transportation InstituteCalifornia. Dept. of TransportationUnited States. Dept. of Transportation. Research and Innovative Technology AdministrationUS Transportation CollectionUsing panel data of transit ridership and gasoline prices for ten selected U.S. urbanized areas over the time period of 2002 to 2011,this study analyzes the effect of gasoline prices on ridership of the four main transit modes\ue2\u20ac\u201dbus, light rail, heavy rail, and commuterrail\ue2\u20ac\u201das well as their aggregate ridership. Improving upon past studies on the subject, this study accounts for endogeneity betweenthe supply of services and ridership, and controls for a comprehensive list of factors that may potentially influence transit ridership.This study also examines short- and long-term effects and non-constant effects at different gasoline prices.The analysis found varying effects, depending on transit modes and other conditions. Strong evidence was found for positiveshort-term effects only for bus and the aggregate: a 0.61-0.62 percent ridership increase in response to a 10 percent increase incurrent gasoline prices (elasticity of 0.061 to 0.062). The long-term effects of gasoline prices, on the other hand, was significantfor all modes and indicated a total ridership increase ranging from 0.84 percent for bus to 1.16 for light rail, with commuter rail,heavy rail, and the aggregate transit in response to a 10 percent increase in gasoline prices. The effects at the higher gasolineprice level of over $3 per gallon were found to be more substantial, with a ridership increase of 1.67 percent for bus, 2.05 percentfor commuter rail, and 1.80 percent for the aggregate for the same level of gasoline price changes. Light rail shows even a higherrate of increase of 9.34 percent for gasoline prices over $4. In addition, a positive threshold boost effect at the $3 mark of gasolineprices was found for commuter and heavy rails, resulting in a substantially higher rate of ridership increase.The results of this study suggest that transit agencies should prepare for a potential increase in ridership during peak periods thatcan be generated by substantial gasoline price increases over $3 per gallon for bus and commuter rail modes, and over $4 pergallon for light rail, in order to accommodate higher transit travel needs of the public through pricing strategies, general financing,capacity management, and operations planning of transit services