Creating virtuous circles between urban planning and urban transit

Cities are not just places where people live. They are massive labour markets and engines of economic growth, facilitating structural transformation of economies towards manufacturing and service activities. New urban transport infrastructure changes how people access jobs and matches employees to firms.

The relationship between urban development and transport systems is both critical and complex. Without effective urban transit, commuting becomes too costly, and cities cannot deliver on their full economic potential.

Many cities in developed countries have a high enough density of demand to support urban transit infrastructure. This is not always the case in developing countries, especially in Africa, where urban structure is fragmented, and firms and households are dispersed. Fragmented urban development disconnects workers from jobs preventing the emergence of sustainable mobility options.

In Nairobi, Kenya, 42 per cent of the population walk to work. They can only access 11 per cent of jobs and even the further 28 per cent who take minibuses are only able to access 20 per cent of jobs.  As a result of this fragmented urban form, Nairobi does not have an integrated labour market. Instead, it functions like a city with multiple small villages.

The fragmented urban form and the preponderance of informal sector jobs in Cape Town, South Africa have made mass transit ineffective when it comes to connecting to labour markets. The Central Business District has become the transfer point for peripheral dwellers to connect to job opportunities on another spoke in the public transport network. The hub-and-spoke public transport network provides inconvenient connections, especially to the poor workers commuting from the periphery.

As such, an increasing number of poor people in South Africa are opting out of the public transport system as they decide to take up jobs closer to their homes. Ironically, government funding flows primarily to large scale transport options, such as railways that carry only 16 per cent of passengers, even as two thirds of commuting trips are made on unregulated minibuses.

Where urban density is higher, scale dependent transport solutions, such as the Bus Rapid Transit, (BRT) can emerge. There are now more than 180 of such systems operating globally, yet little is known about their economic impacts in emerging cities.

Lagos, Nigeria is among the few urban areas in Africa with high density of demand, and one of the first cities in the region to invest in modern mass transit infrastructure.

Lagos has a population of twenty-four million people and an additional one million people are reported to move to the city in search of jobs annually. In an effort to decongest the city and increase productivity, the government has developed an integrated multi-model transport plan that calls for the construction of six railway lines, 14 BRT systems, along with a comprehensive reform of bus and water transport systems.

Currently, people spend four hours in congestion daily, on average, which is detrimental to productivity.

To increase connectivity of isolated communities to the main transport interchange locations, last mile buses have been introduced to connect people to the BRT system. In other areas, non-motorised transport systems, such as bicycle racks where people can rent bicycles to assist with mobility, have been introduced.

However, there has been no research conducted to quantify the benefits arising from transit investment in Lagos. This makes it difficult to know what complementary investments and policies need to be introduced to unlock the full economic potential of the city.

BRT'S EFFECT ON COMMUTER CHOICES AND JOB ACCESSIBILITY

Recent research on Bogota, Colombia's BRT system reveals the immediate effect on commuter choices and job accessibility, as well as the equilibrium effects on wages and house prices.

Thanks to shorter commuting times, BRT systems can significantly increase the number of jobs accessible to residents. This is especially true for the urban poor, who are 25 per cent more likely to commute to work by bus. In addition, the development of new BRT systems increases residential floorspace prices and residential population and yields overall economic welfare gains of one to two percent.

WOMEN AND URBAN TRANSIT

Public transport invigorates local labour market, and their design affects the participation of disadvantaged groups. In particular, poor transit systems have been identified as a major factor in job location choices of women.

Countries like India, Brazil and Mexico have introduced a variety of measures to improve women's safety on mass transit. Several studies show that women are willing to pay more for transport services that offer a sense of increased safety and greater social acceptability:

A study in Rio de Janeiro, Brazil, finds that a fifth of women riders are willing to pay 20 per cent more of the fare to ride in the "safe space" of women-only subway cars, where the risk of physical harassment is reported to be 50 per cent lower.

In Cairo, Egypt, research shows that women are more willing to pay for ride-hailing and ride-sharing due to improved safety relative to other options. Lowering the price of these services further increases female mobility.

In Lahore, Pakistan, a study reveals that offering women-only transport services reduced physical mobility constraints and resulted in increased job searches for women. Those who received a 50 per cent transport subsidy were four times more likely to apply for jobs than those that did not.

SUPPORTING URBAN TRANSPORT PLANNERS WITH NEW QUANTITATIVE ECONOMIC MODELS

Quantifying transit and land use policies is important for helping policy-makers understand what complementary policies should be developed to maximise the return on infrastructure investments.

New Urban Models, such as those developed by Gabriel M Ahfeldt, a professor of urban economics and land development at the London School of Economics, can help city leaders visualise how economic productivity and urban form mutually interact as they provide a better description of the city and give a much richer set of responses to infrastructure investment and policy changes.

For instance, a tradable and dense city may have different options from a crowded and fragmented city. The model developed by Ahfedt of an internal city structure features agglomeration and dispersion forces, and an arbitrary number of heterogeneous city blocks, which makes it tractable and amenable to empirical analysis.

Research on transit infrastructure has mainly been conducted in wealthy economies. There is limited evidence in developing countries, which are vastly different.

For instance, there might be low population density and fragmented distribution, high levels of congestion, and a different set of modal choices, given that a sizable-large informal sector provides the vast majority of commuting trips for many.

There is a need to develop innovative transport solutions that can be efficient and cost-effective in the low-density cities of developing economies. Economic models can play an essential role in informing this process. 

Nick Tsivanides is an assistant professor of the Department of Economics at the University of California at Berkeley; Somik Lall is a lead economist of the World Bank; and Mumba Ngulube is the infrastructure economist at the World Bank.