Public transport pricing: An evaluation of the 9-Euro ticket and an alternative policy proposal

In summer 2022, Germany allowed nationwide access to public transport for just 9 euros per month. In this paper, we examine the effects of this “9-Euro Ticket” and compare our results with other analyses that use different empirical approaches. The evidence shows that the ticket induced only a marginal shift from car to public transport and that it has primarily been used to expand mobility rather than to substitute car trips. We approximate the welfare effects of the policy by estimating the short-run marginal value of public funds to be around 1. Compared to other potential policies, this value is relatively low and indicates that alternative policies could achieve a higher welfare gain at comparable costs. Based on these results and in conjunction with evidence from similar programs and insights from economic theory, we propose and discuss the introduction of dynamic pricing for public transport as a welfare-enhancing alternative. • Analysis of a (almost) fare-free public transport ticket in Germany. • We apply a diff-in-diff approach based on survey data. • The “9-Euro Ticket” induced only a marginal shift from car to public transport. • We estimate the marginal value of public funds between 0.8 and 1.2 • We propose dynamic pricing as a welfare-enhancing alternative.