Title
The political economy of public transport pricing and supply decisions The political economy of public transport pricing and supply decisions
Author
Faculty/Department
Faculty of Applied Economics
Publication type
article
Publication
Source (journal)
Economics of Transportation
Volume/pages
4(2015) :1-2 , p. 95-109
ISSN
2212-0122
ISI
000366329500009
Carrier
E
Target language
English (eng)
Full text (Publishers DOI)
Affiliation
University of Antwerp
Abstract
This paper studies the political economy of public transport pricing and quality decisions in a hypothetical two-region federation. In each region there are two types of people: people not owning a car using only public transport, and car owners that demand both public transport and car trips. Each group may be a majority in the region and may also travel in the other region. Under regional decision-making, the political process may result in very low public transport fares, even if car owners are a large majority of the population. Cost recovery always improves with the share of outside users. Second, imposing a zero deficit constraint on regional public transport operators implements the second-best welfare optimum. Third, decentralized decision making leads to higher fares and better cost recovery. Our findings are consistent with very large public transport subsidies in Europe, and with the tendency towards decentralization of public transport policy-making. (C) 2015 Elsevier Ltd. All rights reserved.
E-info
https://repository.uantwerpen.be/docman/iruaauth/a747a4/130313.pdf
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