Evaluating the Impact of Urban Transit Infrastructure: Evidence from Bogotá's TransMilenio
American Economic Review · 2026 · Volume 116 · Issue 2
Abstract
This paper estimates the effects of improving public transit infrastructure on city structure and welfare. It develops a quantitative urban model with multiple worker groups and transit modes, and derives a special case yielding sufficient statistics for aggregate welfare in a broad class of models. The paper estimates reduced-form elasticities to implement the approach using data spanning construction of the world's largest Bus Rapid Transit system in Bogotá, Colombia. This class of models explains observed adjustments in economic activity. Standard value-of-time calculations capture only 52 percent of welfare gains. Accounting for reallocation and general equilibrium effects, distributional impacts are modest.
Keywords
State and Local Government: Other Expenditure Categories, Railroads and Other Surface Transportation, Industry Studies: Utilities and Transportation: Government Policy, Economic Development: Urban, Rural, Regional, and Transportation Analysis, Housing, Infrastructure, Transportation Economics: Government and Private Investment Analysis, Road Maintenance, Transportation Planning, Public Facility Location Analysis, Public Investment and Capital Stock
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