Neighborhood retail amenities and taxi trip behavior: A natural experiment in Singapore

Abstract

While a small change in land use planning in existing neighborhoods may significantly reduce private vehicle trips, we do not have a great understanding of the magnitude of the project- and shock-based causal change in travel behaviors, especially for the retail purpose. We analyze the impact of newly developed malls on the retail trip behavior of nearby residents for shopping, dining or services. Using the difference-in-differences approach and big data from a major taxi company in Singapore, we find that households residing within 800 meters from a new mall are significantly less likely to take taxis to other retail destinations after the mall’s opening. This travel behavior change encompasses both intensive (the share of the number of retail trips out of total taxi trips originating from each residential building) and extensive (the share of retail trip distance out of total taxi trip distance) margin responses. We further demonstrate that the magnitude of this retail trip reduction is more significant during PM peak hours and for residential buildings that are located farther from the Central Business District and in less self-sufficient communities. Our research provides suggestive evidence on the significant role of neighborhood retail amenities to the change in mode and destination choices for retail. An important implication is that improving self-sufficiency for suburban neighborhoods could not only enhance the well-being of their residents but also increase aggregate welfare by reducing the level of congestion. This is extremely relevant to residential town planning in both developing and developed countries.