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Abstract: Fare-free public transportation has recently gained attention from policymakers and has been proposed as a measure to reduce pollution and road congestion in several cities around the world. We investigate the impact of fare-free public transport on travel behavior by randomly assigning a pass to workers in Santiago (Chile). The pass allowed them unlimited travel for two weeks, as opposed to paying the regular fare of approximately US$ 1 per trip. The main impact of fare-free public transport is an increase in overall travel of 12%. We also find a 23% increase in the total number of trips made during off-peak periods that is explained in equal shares by increases in public transport and non-motorized trips. Two-thirds of the aggregate effect on off-peak travel occurs during weekday off-peak periods and is mostly due to a 28% increase in trips made by public transport. We find no evidence of mode or period substitution and that the effect on public transport trips is entirely explained by trips that use the subway and by individuals who live within one km. from a station.

Keywords: Public transport pricing,Fare-free public transport

JEL classification: R48, H23