Marginal Cost Pricing of Scheduled transport Services. A Development and Generalisation of Turvey and Mohring’s Theory of Optimal Bus Fares

Marginal Cost Pricing of Scheduled transport Services. A Development and Generalisation of Turvey and Mohring’s Theory of Optimal Bus Fares

The conclusion reached in this paper is that optimal pricing of scheduled transport services in any mode will result in a financial deficit, especially in passenger transport.

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Optimal Public transport Price and Service Frequency

Because values of time and passenger behaviour depend on the level of frequency it is found that: (1) in urban public transport there may be one low-deficit local optimum and one high-deficit local optimum, one of which is global; (2) contrary to what might be expected, optimal financial deficit per passenger is typically larger for high frequency services than for low-frequency services; (3) the optimal off-peak may exceed the optimal peak price.

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