Do light rail systems reduce traffic externalities? Empirical evidence from mid-size European cities

Abstract

This paper examines the impact of urban light rail systems on congestion, travel time and pollution. Drawing on data from mid-size European cities, I estimate the impact of supply changes for the entire sample and applied a differences-in-differences analysis to a sample of cities that did not have rail systems in the initial year of the considered period. I find evidence that an increase in the supply of rail transport leads to less congestion, less travel time and less pollution. Furthermore, cities with a new rail system have on average 7% less congestion, 1% less travel time and 3% less pollution than cities with no rail systems. The results suggest that light rail systems have been successful in containing the negative externalities associated with car traffic in mid-size European cities.