Long- and short-run determinants of metro ridership in Seoul: A vector error correction model approach

Abstract

The metro system is essential infrastructure underpinning urban sustainability and citizen mobility. The Seoul metro system has experienced continuous infrastructure expansion, multiple policy changes, and major external shocks over the past 25 years. This study examined the short- and long-run dynamics of Seoul Metro ridership using 300 monthly time-series observations from January 2000 to December 2024. The analysis considered monthly total metro ridership together with population, bus ridership, precipitation days, gasoline prices, and seasonality and incorporated major policy changes, such as the integrated fare system, metro line extensions, and fare increases, as well as the external shock of the COVID-19 pandemic. Methodologically, a Vector Error Correction Model, in conjunction with Impulse Response Functions and Forecast Error Variance Decomposition, was employed to analyze the short-run dynamics and long-run equilibrium relationships. The Johansen cointegration test identified two cointegrating relationships among Seoul Metro, Seoul bus, and Gyeonggi bus ridership. The empirical results indicate that Seoul Metro demand exhibited a negative short-run association with Seoul bus ridership, suggesting a substitution relationship, and a positive association with Gyeonggi bus ridership, suggesting a complementary relationship at the metropolitan scale. Gyeonggi population showed a significant negative association with metro ridership, while gasoline prices showed a positive association. Seasonal effects were also significant, whereas precipitation days were not statistically significant. By contrast, the short-run effects of the integrated fare system, fare increases, metro line extensions, and COVID-19 were not statistically significant. This study demonstrates how multiple socioeconomic, transport, and policy-related factors are associated with metro demand at the aggregate metropolitan-system level and fills a critical gap in the literature, which has focused on short-term impacts. The findings provide empirical evidence to support sustainable public transport policies in large metropolitan areas.