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RWI - Leibniz Institute for Economic Research

Higher fuel prices encourage modal shift towards cycling in urban areas

Cycling on the Extensive and Intensive Margin – The Role of Paths and Prices
Cycling on the Extensive and Intensive Margin – The Role of Paths and Prices © Ruhr Economic Papers #627, Manuel Frondel and Colin Vance

A rise in fuel prices by one euro would increase the use of bicycles in private households by 14.4 percentage points, but only in urban areas. In rural areas, however, no significant effect is to be expected. This is one of the central findings of a recent RWI study, which is based on some 16,300 observations on the mobility behavior of German households between 1999 and 2013.

Cycling is an important part of a sustainable transport policy. In a recent study, the RWI Leibniz Institute for Economic Research has therefore dealt with the question of how to further strengthen bicycle use in private households.

Bike paths are positively correlated with the probability of bicycle use

One of the main findings of the study is that in urban areas an 1 euro increase in fuel prices is associated with a 14.4 percentage point increase in the probability of bicycle use. In rural regions, the modal shift would not change significantly towards the bicycle. One reason for this is probably the fact that the distances are larger there. Another important result shows that the number of kilometers traveled by bike is also statistically significantly higher as the cycle paths extent increases.

Policy should further increase fuel taxes to promote the modal shift towards cycling

This would not only push car drivers to use a bicycle, but also lead to additional tax revenues.

Ecological and social benefits through more cycling

Switching from a car to a bicycle brings many advantages both ecologically and socially: less air pollution, less greenhouse gases, less noise, less traffic congestion. Cycling also contributes to improving health and increases mobility. It is hence not surprising that the Federal Government has the goal to increase the share of bicycle use from today's 10 percent to 15 percent by 2020, which is ambitious considering the fact that the total distance covered by bike between 2000 and 2012 has already increased by almost 50 percent.

The primary data source used in the research covers the 1999-2013 waves of the German Mobility Panel (MOP), a representative multi-year travel survey financed by the German Federal Ministry of Transport and Digital Infrastructure.