BUS DEREGULATION AND PRIVATISATION: AN INTERNATIONAL PERSPECTIVE. CHAPTER 6. TRANSIT POLICY AND THE COST STRUCTURE OF URBAN BUS TRANSPORTATION

The 1978-79 Urban Mass Transportation Administration passenger mile data for 91 urban bus systems are analysed to examine econometrically the distinction between returns to scale and returns to density. Employing a translog cost model these data are used to estimate costs as a function of output measured by passenger miles, input prices of labour, capital and fuel, and output characteristics of load factor, average speed, average trip length and route length. Return to scale are measured as the effect on costs of an equal proportional increase in passenger miles and route length, whereas returns to density are measured as the effect upon costs of a proportional increase in passenger miles accompanied by an equal proportional increase in load factor. Results from estimating both a total cost and a variable cost version of the translog model reveal almost constant returns to scale but substantial economies of density. In addition the variable cost version of the model shows that Federal capital grant subsidies have distorted input choice in the direction of over-investment in capital equipment, leading to substantial excess capacity. These results suggest that the conventional treatment of bus systems as natural monopolies is not correct, and that conditions are favourable for deregulating the industry and substituting a market determined industry structure for a current exclusive franchise industry structure.

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/isbn/0566055767
• Corporate Authors:

  Gower Publishing

  Brookfield, VT  United States 
• Authors:
  • Windle, R J
• Publication Date: 1988

Language

• English

Media Info

• Pagination: p. 119-140
• Serial:
  • Publication of: Gower Publishing Company Limited
  • Publisher: Gower Publishing

Subject/Index Terms

• TRT Terms: Administration; Costs; Economic efficiency; Length; Mathematical models; Operating costs; Public transit; Speed; Travel
• Uncontrolled Terms: Use
• Geographic Terms: United States
• ITRD Terms: 155: Administration; 224: Cost; 237: Economic efficiency; 698: Journey; 6488: Length; 6473: Mathematical model; 221: Operating costs; 744: Public transport; 5408: Speed; 8122: USA; 9084: Use
• Subject Areas: Administration and Management; Economics; Finance; Public Transportation;

Filing Info

• Accession Number: 00498421
• Record Type: Publication
• Source Agency: Transport and Road Research Laboratory (TRRL)
• ISBN: 0-566-05576-7
• Files: ITRD, TRIS
• Created Date: Sep 30 1990 12:00AM