Buses, Houses or Cash? : Socio-Economic, Spatial and Environmental Consequences of Reforming Public Transport Subsidies in Buenos Aires
Transit subsidies in the urban area of Buenos Aires are high, amounting to a total of US$5 billion for 2012. They have been challenged on several counts: suspected of driving urban sprawl and associated infrastructure costs, diverting resources fro...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/889761502738189524/Buses-houses-or-cash-socio-economic-spatial-and-environmental-consequences-of-reforming-public-transport-subsidies-in-Buenos-Aires http://hdl.handle.net/10986/27973 |
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okr-10986-279732021-06-14T10:12:34Z Buses, Houses or Cash? : Socio-Economic, Spatial and Environmental Consequences of Reforming Public Transport Subsidies in Buenos Aires Avner, Paolo Mehndiratta, Shomik Raj Viguie, Vincent Hallegatte, Stephane TRANSIT SUBSIDY CASH TRANSFERS CONSTRUCTION SUBSIDIES LAND USE URBANIZATION HOUSEHOLD WELFARE Transit subsidies in the urban area of Buenos Aires are high, amounting to a total of US$5 billion for 2012. They have been challenged on several counts: suspected of driving urban sprawl and associated infrastructure costs, diverting resources from system maintenance, and failing to reach the poor among others. In this context, this paper examines the impacts of cost recovery fares under a range of different policy scenarios that could cushion the impact of fare increases. The alternative scenarios that are scrutinized are the uncompensated removal of the transit subsidy, its replacement by a lump sum transfer, and its replacement by two different construction subsidy schemes. Using a dynamic urban model (NEDUM-2D) calibrated for the urban area of Buenos Aires, all scenarios are assessed along four dimensions: (i) the efficiency/welfare impact on residents, (ii) the impacts on the internal structure of the urban area and sprawl, (iii) the impact on commuting-related carbon dioxide emissions, and (iv) the redistributive impacts, with a focus on the poorest households. A series of results emerge. First, there are consumption-related welfare gains for residents associated with replacing the transit subsidy by a lump sum transfer. Second, there are only moderate reductions in urbanization over time and thus infrastructure costs associated with the subsidy removal. Third, the replacement of the transit subsidy leads to only moderate increases in carbon dioxide emissions despite lower public transport mode shares, because households will chose to settle closer to jobs, thereby reducing commuting distances. Finally, the replacement of the transit subsidy by a lump sum transfer will lead to short-term harsh redistributive impacts for captive transit users in some areas of the urban area. Medium-term adjustments of land and housing prices will partially mitigate the negative impacts of higher transport costs for tenants, but will further hurt homeowners. 2017-08-24T21:30:32Z 2017-08-24T21:30:32Z 2017-08 Working Paper http://documents.worldbank.org/curated/en/889761502738189524/Buses-houses-or-cash-socio-economic-spatial-and-environmental-consequences-of-reforming-public-transport-subsidies-in-Buenos-Aires http://hdl.handle.net/10986/27973 English en_US Policy Research Working Paper;No. 8166 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Argentina |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
TRANSIT SUBSIDY CASH TRANSFERS CONSTRUCTION SUBSIDIES LAND USE URBANIZATION HOUSEHOLD WELFARE |
| spellingShingle |
TRANSIT SUBSIDY CASH TRANSFERS CONSTRUCTION SUBSIDIES LAND USE URBANIZATION HOUSEHOLD WELFARE Avner, Paolo Mehndiratta, Shomik Raj Viguie, Vincent Hallegatte, Stephane Buses, Houses or Cash? : Socio-Economic, Spatial and Environmental Consequences of Reforming Public Transport Subsidies in Buenos Aires |
| geographic_facet |
Latin America & Caribbean Argentina |
| relation |
Policy Research Working Paper;No. 8166 |
| description |
Transit subsidies in the urban area of
Buenos Aires are high, amounting to a total of US$5 billion
for 2012. They have been challenged on several counts:
suspected of driving urban sprawl and associated
infrastructure costs, diverting resources from system
maintenance, and failing to reach the poor among others. In
this context, this paper examines the impacts of cost
recovery fares under a range of different policy scenarios
that could cushion the impact of fare increases. The
alternative scenarios that are scrutinized are the
uncompensated removal of the transit subsidy, its
replacement by a lump sum transfer, and its replacement by
two different construction subsidy schemes. Using a dynamic
urban model (NEDUM-2D) calibrated for the urban area of
Buenos Aires, all scenarios are assessed along four
dimensions: (i) the efficiency/welfare impact on residents,
(ii) the impacts on the internal structure of the urban area
and sprawl, (iii) the impact on commuting-related carbon
dioxide emissions, and (iv) the redistributive impacts, with
a focus on the poorest households. A series of results
emerge. First, there are consumption-related welfare gains
for residents associated with replacing the transit subsidy
by a lump sum transfer. Second, there are only moderate
reductions in urbanization over time and thus infrastructure
costs associated with the subsidy removal. Third, the
replacement of the transit subsidy leads to only moderate
increases in carbon dioxide emissions despite lower public
transport mode shares, because households will chose to
settle closer to jobs, thereby reducing commuting distances.
Finally, the replacement of the transit subsidy by a lump
sum transfer will lead to short-term harsh redistributive
impacts for captive transit users in some areas of the urban
area. Medium-term adjustments of land and housing prices
will partially mitigate the negative impacts of higher
transport costs for tenants, but will further hurt homeowners. |
| format |
Working Paper |
| author |
Avner, Paolo Mehndiratta, Shomik Raj Viguie, Vincent Hallegatte, Stephane |
| author_facet |
Avner, Paolo Mehndiratta, Shomik Raj Viguie, Vincent Hallegatte, Stephane |
| author_sort |
Avner, Paolo |
| title |
Buses, Houses or Cash? : Socio-Economic, Spatial and Environmental Consequences of Reforming Public Transport Subsidies in Buenos Aires |
| title_short |
Buses, Houses or Cash? : Socio-Economic, Spatial and Environmental Consequences of Reforming Public Transport Subsidies in Buenos Aires |
| title_full |
Buses, Houses or Cash? : Socio-Economic, Spatial and Environmental Consequences of Reforming Public Transport Subsidies in Buenos Aires |
| title_fullStr |
Buses, Houses or Cash? : Socio-Economic, Spatial and Environmental Consequences of Reforming Public Transport Subsidies in Buenos Aires |
| title_full_unstemmed |
Buses, Houses or Cash? : Socio-Economic, Spatial and Environmental Consequences of Reforming Public Transport Subsidies in Buenos Aires |
| title_sort |
buses, houses or cash? : socio-economic, spatial and environmental consequences of reforming public transport subsidies in buenos aires |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/889761502738189524/Buses-houses-or-cash-socio-economic-spatial-and-environmental-consequences-of-reforming-public-transport-subsidies-in-Buenos-Aires http://hdl.handle.net/10986/27973 |
| _version_ |
1764466268399730688 |