The effect of motorways and urban development on car-based mobility in Portugal

Over the past three decades, there was a significant investment in transportation infrastructure, particularly motorways, in Portugal, along with a substantial increase in car usage among commuters. By 2021, 67.6% commuters used cars as their primary mode of transportation. This study investigates the effect of motorway expansion on car-based mobility, focusing on two specific channels: the direct effect of motorway expansion on car-based mobility and the indirect effect mediated through urban development. I used a three-stage least squares (3SLS) instrumental variable estimation technique to jointly analyse urban development and car-based mobility in Portuguese municipalities, with data from 1989/1991 to 2011/2021. The results show that the direct effect of motorway expansion on car usage is positive and statistically significant. While the effect per kilometre is small (0.08 to 0.15 percentage point increase in car usage), over larger expansions of 10 to 20 kilometres, this translates to an increase of 1 to 2 percentage points, which is not negligible. The indirect effects through urban development variables are mixed. The combined direct and indirect effects are positive and significant, but the overall impact is small. This suggests that other factors may have a bigger influence on car-based mobility in the Portuguese context.