ASSESSMENT OF A TRANSIT FARE INCREASE: THE CASE OF THE SOUTHEASTERN MICHIGAN TRANSPORTATION AUTHORITY

Results of a study of a 15-cent across-the-board increase in fares carried out in July 1981 by the Southeastern Michigan Transportation Authority (SEMTA) are detailed. Data from the same riders were gathered both before and after the fare increase; econometric methods tailored to these data were used. The results indicate that sensitivities to the fare increase vary noticeably across types of service. In particular, transit trip making in the off-peak period appears to be nearly twice as sensitive as that in the peak periods. Although fare increases appear to be virtually certain of raising revenues somewhat, differential pricing by time of day would appear to hold promise as a means of maximizing revenues. It is clear that a wide variety of factors influences the use of bus transit. Even if most transit-related factors other than fares (e.g., headways) are virtually constant during the period of study (as was true in the SEMTA system), many nontransit factors (e.g., whether a person works, location of job, location of home) change continually for enough riders to make a difference. Conclusions drawn about riders' sensitivities to fare increases that do not account for changes in nontransit factors are likely to be erroneous. The implications of the findings for pricing policies are presented. To show the possible uses of the results by SEMTA and other transit agencies, examples are given of how to aggregate up to the entire system of patrons and to predict the effects of future fare increases on levels of ridership and revenue. Highlights of the analyses are also given in terms of the relative importance of fares in the use of transit.

• Record URL:
  • http://onlinepubs.trb.org/Onlinepubs/trr/1984/972/972-001.pdf
• Summary URL:
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• Supplemental Notes:
  • Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved. Publication of this paper sponsored by Committee on Public Transportation Marketing and Fare Policy.
• Authors:
  • DAMM-LUHR, DAVID L
• Publication Date: 1984

Media Info

• Media Type: Print
• Features: Figures; References; Tables;
• Pagination: pp 1-8
• Monograph Title: Trends in transit marketing and fare policy
• Serial:
  • Transportation Research Record
  • Issue Number: 972
  • Publisher: Transportation Research Board
  • ISSN: 0361-1981

Subject/Index Terms

• TRT Terms: Before and after studies; Economic elasticity; Fares; Forecasting; Off peak periods; Pricing; Revenues; Ridership; Time dependence
• Geographic Terms: Detroit (Michigan)
• Old TRIS Terms: Differentiated fares; Off-peak
• Subject Areas: Administration and Management; Economics; Finance; Highways; Planning and Forecasting; Public Transportation; Society; I10: Economics and Administration;

Filing Info

• Accession Number: 00392950
• Record Type: Publication
• ISBN: 0309037549
• Files: TRIS, TRB
• Created Date: May 31 1985 12:00AM