Impact evaluation of the public transport subsidy for the elderly in the Madrid region

Resumen

This article assesses the impact of a subsidy for public transport (PT) prices in the Madrid region (MR) for the elderly for expenditures on PT and on households’ automotive fuel. Data from the Spanish Household Budget Survey (HBS) and a discontinuity regression model are used to analyse, on the one hand, whether the PT subsidy meets the equity objective and benefits in terms of well-being the poorest elderly households, and on the other hand, whether the objective of economic efficiency is reached to encourage the beneficiaries of the subsidy to use a more sustainable transport by reducing the use of private vehicles. As far as we know, this is the first work in which PT policy for the elderly has been evaluated from an equity and efficiency point of view. The results show that this public policy has improved the well-being of households from quartile 1 and 2 that have a not employed main breadwinner (MBW), and also those from quartile 4 that have an employed MBW. Therefore, the measure benefits the poorest households among the elderly, but also the richest. In terms of efficiency, the measure has an impact on households with a not employed MBW for quartile 1, 2 and 3, but has no impact on households with an employed MBW. Thus the subsidisation of the PT price has no effect in terms of modal shift for the employed elderly population.