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The impact of rail transit openings on the purchase of cars with different fuel economy

Published online by Cambridge University Press:  28 July 2025

Yinxin Fei ,
Xiao-Bing Zhang Open the ORCID record for Xiao-Bing Zhang [Opens in a new window] ,
Yanlai Chu Open the ORCID record for Yanlai Chu [Opens in a new window] ,
Jie-Sheng Tan-Soo Open the ORCID record for Jie-Sheng Tan-Soo [Opens in a new window]  and
Ping Qin
Yinxin Fei
Affiliation:
School of Applied Economics, Renmin University of China, Beijing, China
Xiao-Bing Zhang
Affiliation:
DTU Management, Technical University of Denmark, Lyngby, Denmark
Yanlai Chu*
Affiliation:
Renmin Business School, Renmin University of China, Beijing, China
Jie-Sheng Tan-Soo
Affiliation:
Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore, Singapore
Ping Qin
Affiliation:
School of Applied Economics, Renmin University of China, Beijing, China
*
Corresponding author: Yanlai Chu; Email: chuyanlai@rmbs.ruc.edu.cn
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Abstract

Excessive car ownership in cities has led to issues including congestion, air pollution and resource consumption. This paper investigates the impact of rail transit openings on automobile purchases in China based on detailed car sales data during 2013–2015 and using two-way fixed effects panel models. Our study reveals an average decrease of 2.27 per cent in car sales due to rail transit openings. Further analyses of cars with different fuel economy reveal stronger effects on fuel-efficient cars, indicating larger substitution elasticity between public transportation and driving for people with less income. Results also show the negative impact of rail transit openings is larger in cities with more developed economies, higher public revenue, larger population, bigger area and fewer buses. The decline in car sales translates into savings of 7.9 billion liters of gasoline and a reduction of about 20.3 million tons in life-cycle carbon emissions.

Keywords

carbon emissioncar purchasefuel economypublic transportationrail transit

JEL classification

Q54: Climate • Natural Disasters and Their Management • Global Warming L92: Railroads and Other Surface Transportation R41: Transportation: Demand, Supply, and Congestion • Travel Time • Safety and Accidents • Transportation Noise

Information

Type
Research Article
Information
Environment and Development Economics , First View , pp. 1 - 23
Copyright
© The Author(s), 2025. Published by Cambridge University Press.

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