Incentivizing public transit to improve performance to meet the programmatic goal of a funding agency

Kofi Obeng

Public Transport, 2024, vol. 16, issue 1, No 6, 187-212

Abstract: Abstract This paper deals with incentivizing public transit systems to exert effort to improve their performance to meet a programmatic goal of a funding agency. It shows the relationship between organisational and employee effort, formulates a net benefit equation with and without user cost savings and derives equations for effort. From these equations it surmises that (a) the larger the incentive the larger the effort transit systems and employees will exert to improve organisational performance, (b) effort is large when user costs are considered and (c) the larger the wage rate the smaller is the effort. In addition, it specifies a labour compensation equation that includes effort and labour intensity as some of its arguments and estimates it with a derived cost function and share equations as a system. The coefficients from them are used to show that when employees are incentivized to exert additional effort to improve organisational performance it increases the incentives, revenue and user cost savings by large proportions and cost by a very small proportion.

Keywords: Incentive; User cost; Passenger revenue; Effort; Public-transit performance; Effort; Compensation function; Cost model (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s12469-023-00340-9

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