Impacts of Gasoline Prices on New Jersey Transit Ridership

This study analyzes the impacts of changes in gasoline prices on New Jersey Transit facility ridership on the basis of observed ridership data between 1980 and 2008. Two separate gasoline price increases are considered: (a) summer 2005 because of Hurricane Katrina and (b) spring 2008 because of oil price increases. New Jersey has been among the nation's leaders in transit investment, with ridership growth that exceeds the national average. Thus, investigating transit ridership trends in the New Jersey area is crucial. To understand the ridership behavior in New Jersey, after controlling for seasonal fluctuation and economic growth factors, cross-elasticity values with respect to gasoline prices are calculated with time-series regression models. Estimation results show that several months elapse before travelers respond to gasoline price changes. Moreover, correlations between transit ridership and employment rate, transit fare, and service rate are statistically significant. Cross-elasticity values with respect to gasoline prices are quite low and range from 0.12 to 0.22 in the short term and from 0.028 to 0.176 in the medium term. The findings of this study are important from an empirical point of view because they are based on real data that contain rarely found significant fluctuations in gas prices along with employment rate and give an opportunity to test the effect of these two factors on transit ridership. These results are also important from an application perspective because transit agencies can use them to make better decisions about transportation system investments, pricing, and deployment of new transit services.