PUBLIC CHOICE, PUBLIC SUBSIDIES, AND PUBLIC TRANSIT. EXECUTIVE SUMMARY

This study is about the political economy of public transit operating subsidies. It uses a public choice framework to investigate how the interaction of economic and political factors influences the effects of public transit operating subsidies on transit system performance. The study focuses primarily on the impact of transit operating subsidies on operating costs, the effect of subsidy source on costs, and the role of private contracting in the provision of public transit services. The empirical evidence provided is based on multiple regression analysis applied to data obtained from a nationwide sample of 118 transit systems for the years 1984, 1985, and 1986. The principal findings are: (1) transit costs seem to rise as the amount of subsidy rises; (2) the cost-increasing effects of subsidies tend to increase the greater the distance of the subsidy source from the local community that benefits from the publicly provided transit service; (3) private contracting in the provision demand responsive transit service has a favorable impact on costs throughout the system; and (4) local subsidies from dedicated tax sources are associated with higher transit costs. The policy recommendations include: deliberate policy initiatives to change the current subsidy system ought to be investigated; the burden of transit finance should be shifted more heavily to local sources; and transit systems should be encouraged to contract out additional services to private suppliers. Increased private contracting and greater reliance on local revenue sources are expected to lower transit costs.

• Corporate Authors:

  University of Mississippi, University

  Department of Civil Engineering
  University, MS  United States  38677

  Urban Mass Transportation Administration

  400 7th Street, SW
  Washington, DC  United States  20590
• Authors:
  • Shughart II, W F
  • Kimenyi, M S
• Publication Date: 1991-2

Media Info

• Features: References;
• Pagination: 16 p.

Subject/Index Terms

• TRT Terms: Governments; Nationalization; Ownership; Private carriers; Private enterprise; Public participation; Regression analysis; Subsidies
• Identifier Terms: Urban Mass Transportation Act
• Old TRIS Terms: Operating assistance; Private operators; Public choice; Umta section 6
• Subject Areas: Data and Information Technology; Planning and Forecasting; Public Transportation; Society;

Filing Info

• Accession Number: 00605347
• Record Type: Publication
• Report/Paper Numbers: UMTA-MS-06-0005-91-2
• Contract Numbers: UMTA-MS-06-0005
• Files: TRIS, USDOT
• Created Date: Mar 31 1991 12:00AM