Public transport subsidies as high as 73 percent do almost nothing to change a person's long-term travel habits.
April 24, 2026
Original Paper
Use It and Lose It: Short- and Long-Term Effects of Transport Subsidies
SSRN · 6626379
The Takeaway
Public transport subsidies fail to create lasting behavioral changes once the discount period ends. Policymakers often assume that a temporary nudge will get people hooked on transit and lead to permanent lifestyle shifts. This study found that the increased use of buses vanished the moment the full price returned. Only individuals who were already frequent transit users before the subsidy showed any change in their long-term behavior. Temporary financial incentives are not enough to break the habit of car ownership or fundamentally shift how a city moves.
From the abstract
This paper provides causal evidence on the short- and long-term effects of a 73% fare subsidy for young adults in Madrid, exploiting an age-25 eligibility cutoff via regression discontinuity. The subsidy increases public transport use by 6.3 percentage points and reduces car travel by 6.5 percentage points while active, but effects decay to 4.5 percentage points one year after removal and vanish thereafter for most users. Persistence emerges only among price- or congestion-sensitive prior transi