Mass Transit

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Mass Transit

• OSullivan
• Chapter 11

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Outline of the Chapter

• Analyze some empirical facts about public transit
  in the United States
• Analyze the commuters decision of travel mode
• Analyze the policy makers decision to design
  public transportation

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Transit Riders by Income Group
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Means of Transportation to Work
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Public Transit Ridership
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Elasticities of Demand for Transit (OSullivan)

• Price elasticity e-0.33
• Time Elasticity
• Line-Haul Portion t-0.39
• Access Time t-0.71
• Value of Travel Time Commuters value the time
  spent in transit about half their wage rate
• Noncommuting Trips Noncommuting travel have
  higher elasticities than commuting travel.

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What does this all means?

• Public transit is quite inelastic increase in
  fare price will increase total revenue.
• Better service and higher fares may result in
  higher transit. People are more sensitive to
  changes in time than to changes in price
• Increase of frequency and speed of buses and
  finances it with higher fares.
• Service improvements that decrease walking and
  waiting time generate increases in ridership.

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Analyzing the commuters decision

• 1. Choice between public transportation and
  driving her own car
• 2. Choice between a bus system or a rail system

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Choice between private or public transportation

• Assume the following parameters
• In vehicle time is valued 0.10 per minute (wage
  rate is 12)
• Walking and waiting time at 1.5Xwage
  (0.30\minute)

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How can we get the consumer to ride the bus?

• Raise cost of car driving
• Congestion Tax
• Gasoline Tax
• Improve Service
• Lower collection and distribution tax
• Lower line-haul time
• Lower the cost of public transportation
• What if we make it free?

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Choice between bus or rail system

• Buses
• Bus headway period of time between buses on the
  bus route
• Space between stops increases line-haul time,
  but decreases collection and distribution time
• Rail System
• Mainline versus integrated systems
• Mainline Systems Relies on other modes to
  collect riders
• Integrated System Entire trip in single vehicle
• Spacing between stations (tradeoff between
  line-haul and collection time)

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Policy Makers Design of a Transit System
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Designing a transit system

• Auto System
• Cost Drivers time operating cost public
  cost
• Recall revenue from congestion tax equals the
  cost of the optimum road
• Cost of the Bus System
• Capital Cost Operating Cost Pollution Cost
  Time Cost of Riders
• BART and Light Rail
• Higher Collection and Distribution Cost
• Higher Capital Cost
• Higher Operating Cost

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Subsidies of Public Transportation
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Fare-Box Ratio The lower the FBR, the larger the
shortfall between fare revenue and operating
costs.
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