Reduced Train Fares in Germany
Introduction
The 9-Euro Ticket was a program introduced in Germany between June 1 and August 31, 2022 that allowed people to buy a €9 monthly ticket that allowed for unlimited local and regional public transport. These tickets were a substantial fare reduction compared to typical monthly subscription tickets, with savings varying by city (for instance, a monthly fare is €115 in Hanover and €86 in Berlin). The program was designed as a way to cushion cost of living increases as well as increase use in public transportation.
To evaluate the effects of the policy, Liebensteiner et al. (2026) utilizes a difference-in-differences and event-study approach, looking at the weekly difference in outcomes between May-September 2022 and May-September 2019. By including May and September, the paper is able to account to differences in ridership between the 2 years, with the rest of the difference being attributed to the 9-Euro Ticket.
The paper estimates that the ticket increased train trips by around 35%, but found only a small decrease in car traffic of 1-5%. Thus, the paper argues that the ticket had limited impact on environmental outcomes.
MVPF = 1.6
Net Cost
The paper calculates the net cost in 3 parts: the direct cost and two fiscal externalities.
The program itself provided a €2.5 billion transfer to different public-transport operators, which was used to subsidize the provision of the ticket.
The other components of net cost were due to changes in tax outcomes. First, as the tickets decreased car usage and thus lowered fuel usage, the paper estimates that the subsidy forgoes energy tax equal to €71.855 million, CO2 price revenue equal to €18.006 million, and VAT on fuel sales equal to €60.393 million.
Second, government revenue is also impacted by changes in taxes paid on the public-transport tickets themselves. The paper estimates this change to be a reduction of €175 million.
The net cost is then €2.5 billion + (€71.855 million + €18.006 million + €60.393 million) + €175 million = €2.825 billion.
Willingness to Pay
The paper estimates willingness to pay as the sum of three components.
First is the value of the subsidized ticket to the people, which is estimated to be €4.315 billion. This number is estimated directly by assuming an (isoelastic) demand curve using a data-generated price elasticity of -0.38.
The second portion is the valuation of the environmental externalities. Specifically, as the tickets decreased car usage and fuel usage, they estimated the emissions and pollution (CO2, NOx, and PM2.5) avoided as well as the car accidents, noise pollution, and traffic avoided. The paper applied standard estimates for the social cost of carbon and the value of reductions in traffic, noise, and accidents from van Essen et al (2019) and UBA (2024), yielding a societal benefit of €134.3 million for emissions and pollution and €144 million for accidents, noise, and traffic.
Lastly, the paper found that the tickets caused an increase in train delays due to increased ridership. To value the disutility caused by these delays, the paper multiplies the additional train-hours of delay with the average passengers per train, then values passenger time based on the share of commuting time vs leisure time and official estimates of the value of time from BMDV (2024). The paper estimates that the disutility from these delays has a value equal to -€89.6 million.
The total willingness to pay is then €4.315 billion + €134.3 million + €144 million – €89.6 million = €4.503 billion.
MVPF Summary
The estimated MVPF of the 9-Euro Ticket is €4,503,170,000 / €2,825,254,000 = 1.594.
To test for robustness, the paper provides alternative specifications of consumer demand for the ticket as well as adjusting the valuation of the environmental and time externalities. In total, the latter changes very little (±0.02 to the MVPF). However, by using the least and most-favorable demand curves that match the 35% increased ridership due to the decrease in ticket cost, the paper finds a lower bound on the MVPF of 0.93 and an upper bound of 2.42.
References
BMDV (2024). Aktualisierung DER kosten- und wertansätze DER bundesverkehrswegeplanung. Federal Ministry of Transport and Digital Infrastructure (Bundesministerium für Digitales und Verkehr; BMDV), www.bmv.de/SharedDocs/DE/Anlage/G/aktualisierung-kosten-wertansaetze-bundesverkehrswegeplanung.pdf.
Liebensteiner, Mario, Jakob Losert, Sarah Necker, Florian Neumeier, Jörg Paetzold, and Sebastian Wichert (2026). “Almost fare free: Impact of a cheap public transport ticket on mobility patterns and train delays.” Journal of Public Economics, 258 (2026) 105655. DOI: https://doi.org/10.1016/j.jpubeco.2026.105655
van Essen, H., van Wijngaarden, L., Schroten, A., Sutter, D., Bieler, C., et al., 2019. Handbook on the External Costs of Transport. Report for the European Commission, Version 2019 – 1.1. DOI: http://doi.org/10.2832/27212
UBA (2024). Modellierung DER umweltwirkung von Tempolimit-Maßnahmen auf autobahnen und außerorts. Umweltbundesamt, https://www.umweltbundesamt.de/sites/default/files/medien/11850/publikationen/176_2024_texte_tempolimit.pdf.
Policy Features
- Category
- Environment
- Sub-Category
- Environmental Subsidies
- Beneficiary Type(s)
- Adults, Children and Youth
- Country of Implementation
- Germany
- Year of Implementation
- 2022
- Empirical Method
- Difference in Differences
- Research Type
- Primary
- Peer Reviewed
- Yes
- MVPF Publication Link
- doi.org/10.1016/j.jpubeco.2026.105655