Association for Public Policy Analysis & Management

The decision to invest on urban transit is often hinged upon its efficacy in achieving economic, social, and environmental benefits. In this paper, we will study the equity impact of urban transit investment in US metropolitan areas.

It has been widely discussed that urban transit systems may promote inclusive growth in metropolitan areas. Limited transportation options might hamper the ability of central city residents to access job locations and secure employment (Kain 1968). As low-income residents tend to rely more heavily on public transit than their higher-income (Giuliano 2005), transit investment may improve the socioeconomic wellbeing of these residents and thus narrow the income gap in urban areas.

This paper examines the linkage between urban transit investment and social inequality in US metropolitan areas. The analysis is made possible with a recently developed longitudinal dataset on urban transit finance across about 500 census-defined urbanized areas (UZA). Using spatial methods to link these urban transit data to income and wage data, we will conduct panel-data analyses to test whether the expansion of urban transit systems – either regular bus systems or the more expensive rail transit -- reduces income and wage disparity at about 400 metropolitan statistical areas (MSA).

Our study will provide important insights into transportation policy and planning. The equity impact of urban transit could provide strong incentives for transit investment to promote inclusive urban development. The findings regarding transit modes (bus versus rail) will help metropolitan areas to priority their investment.