AN ECONOMETRIC MODEL OF URBAN BUS TRANSIT OPERATIONS

This study developed an analytical tool for the examination of the demand and supply characteristics of urban bus transit. The parameters of the model were estimated from cross-sectional data from 44 U.S. bus firms in 1960 and 51 firms in 1968. Analysis of the supply equation provided general evidence on the relationships between bus miles of service, size of the transit market, number of passenger trips demanded, cost per bus mile, and the ratio of cost to revenue. Supply analysis yielded the following results: (1) firms that experienced the highest ratio of total cost to total passenger revenue were private firms owned by power companies and public firms operated by cities, attributed to internal cross-subsidization, (2) firms with high cost-to-revenue ratios tended to operate with lower fares but not significantly higher levels of service, (3) there did not appear to be economies or diseconomies of scale, i.e. no evidence supporting the hypothesis that larger bus systems have lower cost per mile, (4) the major differences in unit costs observed between large and small operations were attributable to differences in wage rates, and (5) unit costs of publicly owned firms were not higher than privately owned firms and, in fact, tended to be lower.

• Supplemental Notes:
  • In Economic Characteristics of the Urban Public Transportation Industry.
• Corporate Authors:

  Institute for Defense Analyses

  400 Army Navy Drive
  Arlington, VA  United States  22202

  Asst Secretary for Policy & International Affairs

  400 7th Street, SW
  Washington, DC  United States  20590
• Authors:
  • Nelson, G R
• Publication Date: 1972-2

Media Info

• Pagination: 85 p.

Subject/Index Terms

• TRT Terms: Bus transportation; Econometric models; Employee compensation; Management; Nationalization; Operating costs; Ownership; Private enterprise; Public transit; Subsidies; Transit vehicle operations; Travel demand
• Old TRIS Terms: Transit management
• Subject Areas: Administration and Management; Motor Carriers; Operations and Traffic Management; Public Transportation;

Filing Info

• Accession Number: 00376963
• Record Type: Publication
• Files: TRIS
• Created Date: Aug 30 1983 12:00AM