Welfare Estimates of Shifting Peak Travel

48 Pages Posted: 5 Sep 2023

See all articles by Robert W. Hahn

Robert W. Hahn

Technology Policy Institute; University of Oxford, Smith School

Robert Metcalfe

University of Southern California

Eddy Tam

King's College London

Date Written: August 2023

Abstract

We develop novel estimates of peak and off-peak price elasticities for urban mass transit demand in San Francisco using a large natural experiment with 3.6 million trip sessions and a natural field experiment that both have exogenous price subsidies. We then estimate the welfare impacts for these price subsidies using a sufficient statistics approach. Our analysis suggests that off-peak subsidies can increase welfare, but the positive effects are reduced when consumers take the decisions of others into account compared to when they do not. We also find a large variation in the welfare impacts of shifting travel to different periods, which is explained by differences in demand and congestion characteristics. Finally, we show that the targeting of subsidies can increase welfare, but need not do so if the regulator does not have accurate information on demand.

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Suggested Citation

Hahn, Robert W. and Metcalfe, Robert and Tam, Eddy, Welfare Estimates of Shifting Peak Travel (August 2023). NBER Working Paper No. w31629, Available at SSRN: https://ssrn.com/abstract=4560556

Robert W. Hahn (Contact Author)

Technology Policy Institute ( email )

1401 Eye St. NW
Suite 505
Washington, DC 20005
United States

University of Oxford, Smith School ( email )

Oxford
United Kingdom

Robert Metcalfe

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

Eddy Tam

King's College London ( email )

United Kingdom

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