Cost-Benefit Criteria for Urban Public Transport Subsidies

J S Dodgson and N Topham
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J S Dodgson: Department of Economic and Business Studies, University of Liverpool, POB 147, Liverpool L69 3BX England
N Topham: Department of Economics, University of Salford, Salford M5 4WT, Lancs, England

Environment and Planning C, 1986, vol. 4, issue 2, 177-185

Abstract: In this paper cost-benefit rules for public transport subsidies are considered. Recent applications of cost-benefit analysis to the appraisal of bus service provision are surveyed, and justifications for public transport subsidy considered. The authors derive the cost-benefit ratio appropriate for considering the benefits to public transport users of a fare reduction financed through increased local taxation on housing services. The cost-benefit rules are then extended to allow for the impact of Central Government assistance through grants-in-aid, and to incorporate allowances for external benefits in the form of reduced road traffic congestion and for income distributional considerations. A cost-benefit rule appropriate for assessing the case for service-level improvements which reduce passenger waiting times is also noted.

Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:4:y:1986:i:2:p:177-185

DOI: 10.1068/c040177

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