DESIGNING EFFECTIVE TRANSPORTATION POLICIES IN MUMBAI

This paper estimates the demand elasticities for modal choice in Mumbai using a nested multinomial logit model. Data used is from the 1990 Mumbai household survey. Results indicate that with an increase in the costs associated with private transit systems, their market share reduces. The outcome of this experiment is that highly elastic private mode demand and reduction in the market share of own vehicles is larger than that of hired vehicles. The increase in the costs of a mass transit system reduces the share of mass transit modes, but it is inelastic. Decrease in market share of one mode is accompanied by an increase in market share of other modes. Income has a positive effect on the market share of private transit modes, particularly on the own vehicles' share. Other explanatory variables such as distance have negative effect on mass transit systems, and duration has negative elasticity for all modes of transportation. Lastly, this paper evaluates pricing-based counterfactual travel reduction strategies in Mumbai. The paper concludes with policy prescription to improve Mumbai's transportation infrastructure.