Thank you to Nick Tsivanidis, Assistant Professor, Haas School of Business, University of California Berkeley, who presented Public and Private Transit: Evidence from Lagos at the Transportation Seminar Feb. 16, 2024.
Abstract: Many of the world’s fastest growing cities rely on private transit, most commonly informal minibuses. As these cities become wealthier they have been investing in centralized public transit lines. If private incumbents respond to government entry by changing frequencies or prices, these investments may lead to indirect effects on those who do not use the new system. This paper studies the effect of public provision of transit in Lagos, Africa’s largest city. We collect new panel data on the informal network to measure how it responds to the rollout of 14 new formal bus routes in the city’s Bus Reform Initiative. Bus departures fall in the informal network by around 26% following government entry, and prices fall on routes where the new option has relatively lower prices. To measure the impacts on consumer welfare, we develop a custom app to measure commuter valuations for price and wait time in an RCT. We combine these estimates with the reduced form results to measure the welfare impact of expanding the formal system that arises from the changes induced in the informal system.
Bio: Nick Tsivanidis is Assistant Professor in the Haas School of Business at the University of California at Berkeley, and Co-Director of the Cities Research Programme at the International Growth Centre (IGC).