Does increasing fuel price reduce traffic? Brown Bag Seminar

CEDS and Doctoral Program of Applied Economics (DET) are hosting the Brown Bag Seminar entitled "Easing the trafic:  The road-use effects of Indonesia’s fuel subsidy reforms by Dr. Paul Burke from The Australian National University. The seminar will be held on Friday 22 January 2016 at CEDS, Jl. Cimandiri no 6-8, Bandung.

Indonesia has serious traffic jams. The study presented in this seminar uses data from 18 Indonesian toll roads over 2008–2015 to calculate the effects of Indonesia’s fuel subsidy reforms on motor vehicle travel. The overnight nature of the reforms provides a natural regression discontinuity setting. Estimates using monthly, quarterly, and annual data suggest an immediate gasoline price elasticity of motor vehicle travel of around –0.1 and a larger, although still inelastic, response over the course of a year. Similar results are obtained using daily data for the Surabaya-Gempol Toll Road. We estimate that the 2013 and 2014 fuel subsidy reforms have reduced motor vehicle trips by around 10% relative to the counterfactual without reform.

The paper will be discussed by CEDS researcher Dr. Martin Siyaranamual and moderated by Dr. Budiono. The seminar is free and open for public.


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Center for Economics and Development Studies is a research center under the Department of Economics, Padjadjaran University, Indonesia. A leading research institute in Indonesia in the area of economics and development studies.
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