Does the Substitutability of Public Transit Affect Commuters’ Response to Gasoline Price Changes?

Abstract

This paper analyzes how driving patterns are affected by gasoline taxes and the availability of a good substitute for driving - public transportation. We develop a measure of transportation accessibility based on the difference between individuals’ predicted commute times by private and public transit, conditional upon their demographic characteristics and geographic location. Our accessibility measure is found to decrease annual vehicle miles traveled (VMT) by inducing modal shifts to public transit, though gasoline taxes are found to have a much larger impact on VMT, both indirectly through mode shifts and directly through decreasing driving patterns. Jointly, gasoline taxes and their revenues recycled into public transit improvements can have large impacts on driving patterns.