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Bus Rapid Transit

Ticket to Ride? Building Efficient and Equitable Cities with Bus Rapid Transit: Guest post by Nick Tsivanidis

This is the fifth in this year’s job market series.
By 2050, 2.5 billion people will move into cities with the vast majority doing so in the developing world (United Nations 2014). This has the potential to lift millions out of poverty by increasing the productivity of firms and workers who benefit from agglomeration. However, rapid and unplanned growth can lead to sprawling, inefficient cities with hours wasted stuck in traffic. Governments will spend vast sums on mass transit systems to reduce commute times (McKinsey 2016), but measuring their benefits is challenging. While individuals save time on any particular commute, their decisions of where to live and work will change as new alternatives become attractive and land and labor markets adjust. The lack of detailed intra-city data in less developed countries coinciding with the construction of large transit systems makes evaluating their causal impact even more daunting.
 
In my job market paper, I ask the question: how large are the economic gains to improving public transit within cities and how are they distributed between low- and high-skilled workers? I construct detailed data across 2,800 census tracts from before and after the opening of the world’s largest Bus Rapid Transit (BRT) system–TransMilenio–in Bogotá, Colombia. I develop a new reduced form methodology derived from general equilibrium theory to empirically assess TransMilenio’s impact on city structure and use this framework to quantify its aggregate and distributional effects.