Subsidies and US Urban Transit Ridership

Peran van Reeven and Vladimir Karamychev

Journal of Transport Economics and Policy, 2016, vol. 50, issue 1, 1-20

Abstract: In recent years, operating subsidies in the USA increased considerably in response to public concerns over traffic congestion and air quality. In a panel of more than 600 transit firms over the period from 1991 to 2012, we find no significant relationship between subsidy and ridership. We show that with a larger subsidy, a transit system operates a larger network but less intensively. At the same time, this subsidy influences service supply in such a way that the quality, as perceived by the traveller, suffers. This is reflected by lower costs of production. © 2016 LSE and the University of Bath

Date: 2016
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