More bus subsidies, better bus benefits? Evidence from the effect of bus subsidy policies in 33 key cities of China

Abstract

To explore the effectiveness of China's current bus subsidy policies, we select 33 key cities in China that have implemented operation subsidies and dedicated bus lane policies from 2016 to 2019 as the study objects. Utilizing a propensity score matching approach to control for urban characteristic variables, we examined the relationship between different levels of subsidy policies and bus benefits. We calculated the propensity scores of the samples, matched them accordingly, and then derived quantitative results on the impact of the bus subsidy policy. We used lagged variable and whether a city is a coastal city as an instrumental variable to conduct an endogeneity test and found no evidence of endogeneity. The results show that a high proportion of dedicated bus lanes has a significant boosting effect on the improvement of bus benefit, and theoretically the promotion effect reaches 8.3%. A high level of operation subsidies can improve bus benefits by 3.5%, but it is not significant. The larger the sidewalk area per capita, the less likely a city will receive high levels of operation subsidies. Cities with higher population density and larger urban road area per capita may not construct a higher proportion of dedicated bus lanes, while cities with more car ownership and bus parking area are likely to construct more dedicated bus lanes. Our study contributes to bus subsidy research by employing a propensity score matching method that minimizes sample selection bias, ensuring the reliability of the results. This paper provides a theoretical basis for the adjustment of China’s urban bus subsidy policy and enriches bus subsidy research.