Commuting, Labor, and Housing Market Effects of Mass Transportation: Welfare and Identification

Abstract

Abstract I study Los Angeles Metro Rail's effects using panel data on bilateral commuting flows, a quantitative spatial model, and historically motivated quasi-experimental research designs. The model separates transit's commuting effects from local productivity or amenity effects, and spatial shift-share instruments identify inelastic labor and housing supply. Metro Rail connections increase commuting by 16% but do not have large effects on local productivity or amenities. Metro Rail generates $94 million in annual benefits by 2000 or 12–25% of annualized costs. Accounting for reduced congestion and slow transit adoption adds, at most, another $200 million in annual benefits.