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ESTIMATING THE ECONOMIC BENEFITS FROM PUBLIC TRANSPORT SUBSIDY

Based on earlier work by Dr. Stephen Glaister, and in conjunction with him, the Department of Transport have developed a computer model for the assessment of the economic benefits given by local public transport subsidy. This work is particularly relevant in the light of the House of Lords' judgement in relation to London transport, and the subsequent reference to "benefits" in the new Transport Act. The aim of the assessment method is to make a fully comprehensive evaluation of the total transport benefits resulting from a public transport fare or service level change. In addition to bus and underground, rail and private road transport effects are therefore also included. Benefits are calculated in the conventional manner in relation to changes in demand, specifically as the net social benefit, equal to the increase in gross benefits minus any corresponding increase in subsidy. Thus, in the case of a fares reduction, additional costs to tax and rate payers are subtracted from the benefits to passengers. The model is driven by assuming that travellers' behaviour is rational in terms of generalised cost; thus the demand response to changes in service level is related to empirical fares elasticities through standard values of time. Effects on traffic congestion are taken into account through speed-flow curves; and any change in public transport overcrowding is allowed for in terms of changes in waiting time. What matters, as a criterion, in using the model are the marginal benefits per additional L1 of subsidy from any change in policy. This criterion can be used to assess whether fare and service levels are in sensible balance, in which case the marginal benefit/L would be approximately the same for either a fare or service level change; and, assuming that subsidy is thus used in a balanced way to give the highest benefits, subsidy levels in different areas can be compared in terms of benefits value-for-money. The results to date suggest that, in fact, fares and service levels are often out of balance; and that the value for money at the existing subsidy levels in different areas varied considerably. The marginal benefits/L of South Yorkshire's low fares policy is substantially lower than the values being obtained elsewhere; and there is a clear difference in this respect between London's "fares fair" policy and the increased fare levels which followed the House of Lords' judgement. It is not claimed that the benefits accounted in this method are the only positive social gain from subsidy. But in that they include in principle major effects on the whole transport system, they are at least important. Although the main application of the method to date has been in assessing subsidy policy at the aggregate, city-wide level, an important advantage of the method is that it is equally applicable in principle to individual bus routes. (Author.TRRL)

  • Availability:
  • Supplemental Notes:
    • Transport Policy. Proceedings of Seminar M held at the PTRC 11th Summer Annual Meeting, University of Sussex.
  • Corporate Authors:

    PTRC Education and Research Services Limited

    110 Strand
    London WC2,   England 
  • Authors:
    • Glaister, S
    • SEARLE, G
  • Conference:
  • Publication Date: 1983

Media Info

  • Features: Figures; Tables;
  • Pagination: p. 5-18

Subject/Index Terms

Filing Info

  • Accession Number: 00381593
  • Record Type: Publication
  • Source Agency: Transport Research Laboratory
  • ISBN: 0-86050-112-4
  • Report/Paper Numbers: Volume P240
  • Files: ITRD, TRIS
  • Created Date: Mar 30 1984 12:00AM