Public transport Flashcards
what is the main alternative to cars?
public transport
-4.3bn trips by bus per year in England
what is the economics of public transport
public transport consume many resources
there are key variables we must consider
- density and f(x) of service
what are the OC of public transport
Operator & infrastructure costs: •Infrastructure:tracks,depots…
•Rollingstock(vehicles)
•Operating costs: personnel, energy, fuel, maintenance
what are the UC of public transport?
Access time
- time required to access a vehicle –> distance between stops
Waiting time
- depends on service frequency
in-vehicle time
- depends on network conditions (crowding)
- in behicle conditions(crowding)
Fare is NOT a UC, since its just a TRANSFER from users to operator
what are the estimates of value of time? not important
Access time: 20£
Waiting time at station: 25£
waiting time at home: 7.5£
in vehicle time: 15£
what are the 2 economies of scale
Economies of density: more vehcicles-kms
for given network size
Economies of size: more links to the network
draw a diagram representing economies of scale
MC
AC(q)
how does Public transport exhibit economies of scale
economies of density
- EOS by expanding density of output
- more vehicles on the road
whats a trade-off with optimizing frequency
trade-off with cost with the operator
- reduces time for users and crowding
- but OC will increase
what did Mohring say about transport frequency
when time.cost is taken into account there will be EOS in oublic transport
- OC cant display this
draw the optimal f(x) fiagram
cp= total cost for a public transport operator
cb = the indifference curve
- optimal f(x) cost of marginal increasing f(x) = mb, through reduced time
- benefit from reduced time increases with the number of users
what is the square root rule?
doubling q passengers, 40% HIGHER OPTIMAL F(X)
what is economies of density
when AC reduces with an increase in the quanitity of output
what is the rationale of economies of density
subsidise public transport –> due to relationship between optimal pricing and operator financial viability
draw the diagram explaining why public transport needs subsidies
socially optimal point for a fare is MC.op
- this is lower than AC.op
- subsidies firms so they can keep running
the 2 indifference curves
why is setting fare =AC.oc bad?
e=it would ensure revenue cover costs
-too high and restrict the volume of public transport excessively
give the reason for subsidies
Optimal frequency
- increase with q of passengers but less porportionally
MC of serving one customer < AC
Externalities between users
- make user internalize the benefit
- prevent operators going bankrupt
The presence of economies of density in public transport services implies subsidies are optimal because
The optimal public transport fare should be smaller than the average operator cost
without binding capacity constraints is it necessary to increase frequency?
not strictly
As an additional passenger comes on
- the optimal f(x) will increase
+ve externality
- for users, since waiting time will reduce as a respone to an additional user
what are the policy implications of the fare being lower than the AC
positve effect of a additional user on waiting time- set fare below MC of a trip
There is an external benefit associated to travel on public transport because
Additional users induce an increase in frequency, which benefits other users as well
compare public transportation of techonlogies: light rail , metro and BRT
Real-life example:
• Tirachini et al 2010
• Stylized a monocentric city with radial transport network
• Optimize network density and frequency minimizing total user cost and total OC
Results
• Heavy rail has the highest infrastructure cost and cost of rolling stock
• Light rail is intermediate
• BRT has a smaller OC but capacity of vehicles is small relative to others implement a higher frequency than the other 2 models
