Mode choice inertia and shock: Three months of almost fare-free public transport in Germany

• Published in: Economics of transportation (England) 2025-03, Vol.41, p.100382, Article 100382
• Main Authors: Guajardo Ortega, Maria Fernanda, Link, Heike
• Format: Article
• Language: English
• Subjects: GPS panel data; Inertia; Mode choice; Price elasticities; Revealed preference; Shock
• ISSN: 2212-0122
• DOI: 10.1016/j.ecotra.2024.100382

This study analyses travellers’ behavioural responses to two temporal measures implemented by the German government: the reduction in public transport prices, making it almost fare-free, and a decrease in fuel taxes to the minimum level permitted by European law. Based on a panel dataset of GPS-tracked trips collected before and during the price intervention from a representative sample of 276 individuals, with 1650 commuter trips per month. We estimate mixed logit models incorporating two temporal effects—inertia and shock—to account for habitual behaviour and capture both interventions' impact. The only travel mode with significant inertia is car, indicating that car drivers are less likely to change their travel mode. While the shock parameter for the fuel price intervention was not significant, we found a significant and positive shock effect for public transport which decreased over time during the policy. Furthermore, elasticities calculated pre- and during the intervention are considerably lower when habitual behaviour is considered. From the existence of inertia effects and low price elasticities, we conclude that the temporary intervention of almost fare-free public transport alone was not sufficient to achieve a modal shift from car to public transport for commuter trips. •We estimated mixed Logit models with and without inertia and shock effects.•We derive direct and cross-elasticities of demand with respect to cost and travel time.•Commuters are rather inelastic to price changes.•Car drivers' inertia makes them less willing to change their travel mode.•Price elasticities tend to be lower when considering travelers' habits.