What moves Hong Kong's train ridership?

Abstract

Hong Kong is a densely populated international metropolis with ∼7.5 million residents living in a small geographic area of ∼1,100 km2. Like some major cities around the world, it has a vast public transportation system that moves ∼12.4 million passengers per day, ∼42% of which is attributable to the Mass Transit Railway's (MTR's) extensive network interconnecting widely dispersed stations across Hong Kong. MTR's ridership substantially declined in 2019 because of social unrest and related system service suspension (SSS). This decline was further exacerbated by Covid-19's outbreak in 2020. Using a hand-collected sample of monthly data for January 2000–June 2020, we estimate a log-linear demand regression to find that MTR's ridership is price and income inelastic, varies seasonally, and exhibits a trend of gradual growth. Further, Covid-19, social unrest and SSS significantly reduce MTR's ridership. Finally, the estimates for passenger welfare losses due to SSS and social unrest are large, revealing the potential gains from improving MTR's service reliability and resolving the root causes of social unrest.