Abstract
This study estimates the causal effect of transportation subsidies or similar benefits on the health of elderly people. We exploit a discontinuity in the probability of receiving transportation benefits induced by an age-based policy to take into account the endogeneity of treatment status. Our baseline IV results indicate that receiving public transportation benefits significantly improves elderly people's health condition by approximately 10 percentage points. The results are robust under different specifications and placebo tests. Further tests on possible channels show that the health effect is driven by increasing food consumption and health care utilization, but not by the amount of exercise done.
Highlights
Public transportation is a key component of our lives that offers a safer, more economical, and more environmentally friendly transit choice
Using the sudden change in the probability of receiving transportation benefits around age 70, we clearly identify the causal effect of transportation on health status among the elderly by a fuzzy regression discontinuity design (FRD), which is equivalent to the instrumental variable (IV) approach
We discuss the estimates of FRD design, which were designed to analyze the policy impact of transportation subsidies on health status among the elderly
Summary
Public transportation is a key component of our lives that offers a safer, more economical, and more environmentally friendly transit choice. According to Parry and Small (2009), average passenger fare subsidies account for 65% of operating costs across the twenty largest transit systems in the U.S Despite the huge cost of granting them, reduced fare and free ride permits for senior citizens and individuals with disabilities are offered in many cities Do these public transit programs really benefit citizens’ health?. Our estimates are probably very close to the average treatment effects (ATE) that capture the health impacts of free public transit on the overall aging population. This paper relies on a remarkable natural experiment in Shanghai, where 82.5% eligible elderly people receive free transit benefits, to estimate the average impacts of transit subsidies on senior citizens’ health statuses.
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