Should buses still be subsidized in Stockholm?

Maria Börjesson (), Chau Man Fung () and Stef Proost
Additional contact information
Maria Börjesson: CTS, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden
Chau Man Fung: Katholieke Universiteit Leuven, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden

No 2015:19, Working papers in Transport Economics from CTS - Centre for Transport Studies Stockholm (KTH and VTI)

Abstract: Many public transport services are heavily subsidized. One of the main justifications of this is the expected beneficial effect on road congestion. Stockholm introduced congestion pricing in 2006 and the effects on car and public transport demand were carefully monitored. This change in prices provides unique estimates on price- and cross-price elasticities. This paper uses these data to model the optimal pricing, frequency, bus size and number of bus lanes for a corridor in the presence of congestion pricing of cars. Results show that the subsidies for peak bus trips are indeed too high. However, the major welfare benefits of the reform are due to a decrease in frequencies during the off-peak period and the use of larger buses.

Keywords: Public transport; Bus fares; Bus lanes; Bus frequency; Subsidies; Congestion pricing (search for similar items in EconPapers)
JEL-codes: D61 H54 R41 R48 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2016-01-25
New Economics Papers: this item is included in nep-pub, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
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http://www.transportportal.se/swopec/CTS2015-19.pdf (application/pdf)

Related works:
Working Paper: Should buses still be subsidized in Stockholm? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:ctswps:2015_019

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