Effect of high-speed trains on passenger travel : evidence from Korea

In this paper, we evaluate the impact of high-speed train introduction on passenger transport. In particular, we examine whether the introduction of the high-speed train could increase the demand for train travel and substitute the demand for air travel. To address the question, we exploit the exogenous timing of high-speed train introduction in Korea and apply a difference-in-differences framework to examine the effect of high-speed train introduction on the market share of trains and domestic airlines among mass transit. Using the Korean administrative data, we find that high-speed train introduction has a substantial impact on the entire passenger transport. Specifically, we document a discrete increase in the number of train travelers in the city pairs that are directly connected by high-speed train after the introduction. We also present a discrete decrease in the share of air travelers for those city pairs, which suggests a certain amount of rivalry between modes of mass transportation