A Model of Subsidy Allocation for Bus Transit Deficit Routes in Taipei City, Taiwan

Although the bus transit operators with deficit routes have been directly subsidized by the government in Taipei city, the present criteria for subsidy allocation among the bus transit operators are not quite reasonable from the point of economy. Therefore, in order to locate the resource of subsidy more reasonable and fair, this study aims to develop a model of subsidy allocation, which is established based on the maximized social welfare under the constraint of subsidy budget of government. The operational data of eleven bus transit operators in Taipei are employed in the model to calculate the reasonable distributed subsidy for the deficit routes. Comparing with the existing condition of subsidy distribution, the model shows that eight private operators were subsidized insufficiently and the others including the public operator had been over-distributed. The theory of the Minimum Efficient Scale is applied to estimate the optimal output via the cost function of the route and the reasonable amount of subsidy for each route is also suggested while the optimal scale of output is estimated. By using the approach, the re-allocated subsidy estimated by the model can improve the producer¡¦s surplus for most of bus transit operators to reach the reasonable level.


  • English

Media Info

  • Media Type: CD-ROM
  • Features: Figures; References; Tables;
  • Pagination: 11p
  • Monograph Title: TRB 86th Annual Meeting Compendium of Papers CD-ROM

Subject/Index Terms

Filing Info

  • Accession Number: 01047585
  • Record Type: Publication
  • Report/Paper Numbers: 07-3227
  • Files: TRIS, TRB
  • Created Date: Feb 8 2007 7:56PM