THE EFFECT OF INFLATION AND REAL INCOME GAINS ON CHOICE OF MODE FOR URBAN RAPID TRANSIT INVESTMENT

THIS REPORT CONSIDERS THE DIFFERENTIAL FINANCIAL EFFECT THAT INFLATION AND INCOME CAN HAVE ON CAPITAL INTENSIVE AND LABOR INTENSIVE APPROACHES TO MASS TRANSIT SUCH AS RAIL AND EXPRESS BUS SERVICE. IT IS THE OPINION OF THE AUTHORS THAT THE EFFECT OF THESE FACTORS HAS NOT BEEN WELL STUDIED. THE STUDY EMPLOYS A SIXTEEN MILE HYPOTHETICAL TRANSIT CORRIDOR, SERVICE 30 MILLION PASSENGERS A YEAR, WHICH IS COSTED FOR BOTH RAIL AND EXPRESS BUS. COST AND REVENUE FACTORS ARE INFLATED USING A RANGE OF ASSUMPTIONS. RIDERSHIP AND TREND ASSUMPTIONS ARE ALSO VARIED. NET PRESENT VALUES OF REVENUES MINUS COSTS (INCLUDING AMORTIZATION) FOR THIRTY YEARS OF OPERATION ARE THEN ESTIMATED IN CASH TERMS AND COMPARED. IT WAS FOUND THAT BUS OPERATION IS MORE SENSITIVE TO REAL WAGE INCREASES, AND LESS SENSITIVE TO INFLATION AND TO RIDERSHIP LEVELS. THE FINANCIAL VIRIANT FOR BUSES WAS CONSIDERABLY LESS THAN FOR RAIL WHICH, ADDED TO THE SHORTER TIME NEEDED TO INSTITUTE BUS SERVICE AND THE GREATER FLEXIBILITY OF BUSES, WOULD, ACCORDING TO THE AUTHORS, PLACE IN QUESTION THE WISDOM OF THE CURRENT TREND TOWARD RAIL RAPID TRANSIT. VARIOUS ILLUSTRATIVE TABLES AND FIGURES ARE INCLUDED. /UMTA/

  • Supplemental Notes:
    • Contract FL-11-0003
  • Corporate Authors:

    Urban Mass Transportation Administration

    400 7th Street, SW
    Washington, DC  USA  20590
  • Publication Date: 1973-8

Media Info

  • Pagination: 87 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00201075
  • Record Type: Publication
  • Source Agency: Urban Mass Transportation Administration
  • Report/Paper Numbers: UMTA-F1-11-0003-73-2Final Rpt.
  • Files: TRIS, USDOT
  • Created Date: Jul 22 1974 12:00AM