housing, transport and other goods to the increase in public transport fares. Our short term result should therefore be interpreted with caution and not as a long term exercise.

# 8 Conclusions and perspectives

The research presented above could benefit from modeling improvements to become more realistic and shed light on a richer set of issues. The most pressing need is to develop the NEDUM-2D model so that it can represent multiple income classes and their locational decisions within urban areas. This would allow to look at the long term redistributive impacts of various policies. A second possible direction for improvement is to enhance NEDUM-2D so that it can account for multiple job centers, going beyond the monocentric assumption, and include amenities and social segregation mechanisms. This addition to the model would help get rid of some discrepancies between simulation results and data and would therefore increase its capacity to convince. While we strongly believe that our main conclusions would be unaffected by the addition of polycentrism, it remains an empirical question. Lastly, the NEDUM-2D model does not account for congestion as it implicitly assumes that investments can be made so that additional road or public transport frequentation does not lead to higher transport times. Explicitly accounting for congestion would be an important improvement to the modeling framework.

The set of results presented in this paper paints a complex picture of public transport subsidies in the urban area of Buenos Aires. It appears that an ideal solution would be to channel lump sum transfers only to the poorest households. This solution requires detailed registries recording households’ incomes and their evolution over time. A second best alternative would be to have only the poorest households in Buenos Aires benefit from transit subsidies. This solution would protect the poor users of transit without entailing dramatic efficiency or environmental negative impacts. It would also allow for some public finance savings which could be channeled toward other issues such as investments in the public transport infrastructure or could be put towards targeted construction subsidies as discussed in this paper.

# 9 References

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