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The Effects of Gasoline Prices on Urban Travel Demand: Evidence from Chicago


I investigate how sensitive is urban travel demand in Chicago to gasoline prices. I estimate the effect of gasoline prices on the number of vehicles circulating in the Chicago area and the substitution patterns between automobile circulation and public transportation. My approach exploits both cross sectional and time series variation in the data by including subarea disaggregation within Chicago area. I .find that public transportation use (CTA-Rail, CTA-Bus, Pace-Bus and Metra-Rail) increases and vehicle use decreases as gasoline prices increase. Single-trailer trucks are substituted by multi-trailer trucks.