The Impact of Integrated Tariff Systems on Public Transport Demand: Evidence from Italy

The increasing problems of pollution and traffic congestion require the definition of a model of sustainable mobility – in particular, in large, urban areas. An indirect control on these negative externalities associated with private transport may be pursued by means of policies aimed at improving quality and accessibility of public transit networks. To that end, one popular option is the design of an Integrated Tariff System (ITS): the crucial question remains whether such a policy can be effective in raising the number of public transport users. In this study, we use a twelve-year panel of 69 Italian public transit providers (with or without ITS) and estimate alternative specifications of the demand function. Results show that the impact due to ITS introduction is, on average, moderate. Results also highlight the importance of taking into account the specific features of ITS, such as its validity over an extended network, the availability of a single ticket option, and the application of zonal pricing schemes.