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Are public transport improvements endogenous with respect to employment and income location in a city?

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Abstract
Previous research has proved the existence of a causal relationship between the concentration of jobs in a city and the income of inhabitants. Other researchers have studied the close and nearly causal relationship between those variables and the infrastructure such as highways in different zones of a city. Nevertheless, no one study has taken into account the degree to which each area of a city benefits from the latest improvements to public transport. The aim of this research is to analyse the relationship between the size of the labour market, the income and the employment concentration with respect to improvements to public transport (Transmilenio) in Bogota. The degree of enhancement of public transport in a zone is suspected to be endogenous. Through the use of OLS estimations and then 2SLS, the validation of endogeneity provides sufficient tools to infer causality of improvement of public transport. The size of companies, defined by the number of jobs they offer, plays the role of instrumental variable. In essence, the number of jobs, the size of the labour market and income are largely defined by the level of improvement to urban public transport in each zone of the city but the causality relationship changes depending on the size of companies established in each zone. In the case of Bogota, public transport improvements seams to have a causality relationship with the income of inhabitants in each zone and the number of jobs, and this changes with respect to the size of enterprises. In contrast, the size of the labour market, defined as the number of jobs reachable in a specific time, is not determined by the degree of the presence of public transport enhancement

Suggested Citation

  • Carlos Augusto Olarte Bacares, 2014. "Are public transport improvements endogenous with respect to employment and income location in a city?," Documents de travail du Centre d'Economie de la Sorbonne 14012, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:14012
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    References listed on IDEAS

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    Cited by:

    1. García, Gustavo A. & Ramírez-Hassan, Andrés & Saravia, Estefanía & Vargas, Raquel & Duque, Juan Fernando & Londoño, Daniel, 2022. "Impacto de las intervenciones físicas en el transporte público en Medellín (Colombia) como herramientas para reducir la exclusión social," IDB Publications (Working Papers) 12014, Inter-American Development Bank.

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    More about this item

    Keywords

    Causality; improvements of public transports; endogeneity; effective size of labor market; size of enterprises;
    All these keywords.

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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