United States Department of Transportation
i
Net effects of gasoline price changes on transit ridership in U.S. urban areas.
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2014-12-01
[PDF-2.34 MB]
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Abstract:Using 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—bus, light rail, heavy rail, and commuter
rail—as well as their aggregate ridership. Improving upon past studies on the subject, this study accounts for endogeneity between
the 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 positive
short-term effects only for bus and the aggregate: a 0.61-0.62 percent ridership increase in response to a 10 percent increase in
current gasoline prices (elasticity of 0.061 to 0.062). The long-term effects of gasoline prices, on the other hand, was significant
for 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 gasoline
price level of over $3 per gallon were found to be more substantial, with a ridership increase of 1.67 percent for bus, 2.05 percent
for commuter rail, and 1.80 percent for the aggregate for the same level of gasoline price changes. Light rail shows even a higher
rate of increase of 9.34 percent for gasoline prices over $4. In addition, a positive threshold boost effect at the $3 mark of gasoline
prices 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 that
can be generated by substantial gasoline price increases over $3 per gallon for bus and commuter rail modes, and over $4 per
gallon 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.
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