Optimal Pricing and Subsidies for Scheduled transport Services

Optimal Pricing and Subsidies for Scheduled transport Services

Building on previous discussion in this Journal, the author suggests that optimum subsidies could possibly be as high as 60 per cent of an operator's costs. But fares and the level of service should also be controlled. travel cards may provide a form of two-part tariff for public 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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