Estimating the impact of new rail station openings on through-passenger demand: a difference-in-differences approach

Abstract When a new rail station is built on an existing line, it causes an increase in in-vehicle time – typically, between 2 and 4 min – for all existing trips that now stop at the new station. To the best of our knowledge, this paper is the first to investigate the impacts of these small time penalties on through-passenger demand. Cost-benefit appraisals of new stations in the UK have proven highly sensitive to the forecasts of through-passenger demand reductions. We conduct an ex-post analysis of the effect of a new station on through-passenger demand using a Difference-in-Differences approach. We fail to find a statistically significant impact of the station opening on through-passenger demand. If there are such demand impacts, our findings suggest that these are smaller in magnitude than the standard forecasting approach implies. More research is recommended to corroborate and generalise the findings to other contexts, as these have important implications for the planning and appraisal of new stations.