Cities that subsidize transit will get the best value for money in the absence of congestion pricing and bus lanes.

Should urban authorities subsidize public transport systems? Many academics who have studied transport pricing disagree on the answer. In new research, which examines transit subsidies in London, UK, and Santiago, Chile, Leonardo Basso and Hugo Silva find that bus lanes, car congestion pricing, and subsidies can all be very effective in improving people’s welfare – but that adding an additional policy does not have as much of an effect as the first. They argue that policymakers who wish to help the poorest should put into place transit subsidies, as this will do the most to help the poor and redistribute incomes, compared to the alternatives.