, Volume 36, Issue 5, pp 601–616 | Cite as

Regulation of the informal transport sector in Rio de Janeiro, Brazil: welfare impacts and policy analysis

  • Aaron GolubEmail author
  • Ronaldo Balassiano
  • Ayres Araújo
  • Eric Ferreira


In Brazil, the explosion of informal transport activity during the past decade has had profound effects on formal public transport systems and is a source of great controversy in the urban transportation sector. A variety of policies have been proposed to manage the growth of the sector. This study seeks to understand how proposed policies will impact the users of these systems. A corridor in Rio de Janeiro with substantial informal activity was used as a case study. Measures of welfare changes in a discrete choice framework were used to estimate proposed policies’ impacts on users. Eleven candidate policies were evaluated, ranging from the eradication of the informal modes and investment in formal modes, to the legalization of the informal modes. Benefits were compared with costs and the distribution of benefits across income classes was explored. Net benefits from some policies were found to be substantial. Legalizing the informal sector was found to benefit users slightly but further investments in the sector are probably inefficient. Users benefited most from improvements in formal mass transit modes, at roughly 100–200 dollars per commuter per year. Finally, policies to foster a competitive environment for the delivery of both informal and formal services were shown to benefit users about 100 dollars per commuter per year. Together, the regulation of the informal sector and investments in the formal sector serve to reinforce the movement towards competitive concessions for services and help reduce the impacts of cartelization and costly in-road competition.


Informal transportation Brazil Regulation Welfare Jitneys 



The National Association of Urban Transportation Companies


National Association of Public Transportation


National Workers Union


National Confederation of Transport Workers


Compensating variation


Medium-run marginal cost



The background research for this project could not have been accomplished without the help of Professor Romulo Dante Orrico Filho and other staff in the Transportation Engineering Program at the Federal University of Rio de Janeiro. Golub’s doctoral committee at University of California, including Martin Wachs, Elizabeth Deakin, Robert Cervero, and Samer Madanat also contributed to this work. This work was funded in part by the Brazilian Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq), the Institute of Transportation Studies and the Center for Latin America Studies at UC Berkeley, the National Science Foundation, and the Tinker Foundation.


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Copyright information

© Springer Science+Business Media, LLC. 2009

Authors and Affiliations

  • Aaron Golub
    • 1
    Email author
  • Ronaldo Balassiano
    • 2
  • Ayres Araújo
    • 3
  • Eric Ferreira
    • 4
  1. 1.School of Geographical Sciences and Urban Planning and School of SustainabilityArizona State UniversityTempeUSA
  2. 2.Centro de Tecnologia Ilha do Fundão, Transportation Engineering ProgramFederal University of Rio de Janeiro, Cidade UniversitariaRio de JaneiroBrazil
  3. 3.ENGEVIX Engenharia S/ABarueriBrazil
  4. 4.Faculdade de Tecnologia da Baixada SantistaSantosBrazil

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