How do subways affect urban passenger transport modes?—Evidence from China

Abstract

This paper examines how the opening of a subway affects urban passenger transport modes. The DID method is applied to a dataset of 43 Chinese cities where subway development plans were approved between 1994 and 2015. This paper finds strong evidence that subways affect people's choice of travel modes. Specifically, every new subway line put into operation annually diverts about 4.1 percent of bus passengers, which is equivalent to saving at least 10 bus lines. Furthermore, subways supplement the existing bus systems, but do not have a crowding-out effect on the number of buses or the length of bus lines. The opening of subways reduces the number of taxis and cars on the road.