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Road Pricing and Bus Service Policies

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  • Kijung Ahn

Abstract

This paper focuses on the fare and frequency of bus services when underpriced automobiles and buses use the same road. Three types of bus provision are considered: (1) second-best, (2) private monopolistic operation, and (3) operation under zero-profit constraint. By incorporating congestion interaction, this paper derives a decision rule on each bus service. Moreover, by investigating the effect of road pricing, it is shown that the direction of change in bus fares and private welfare depends on type of provision. More importantly, it is shown that private welfare can be improved even without revenue recycling due to the congestion interaction. © 2009 LSE and the University of Bath

Suggested Citation

  • Kijung Ahn, 2009. "Road Pricing and Bus Service Policies," Journal of Transport Economics and Policy, University of Bath, vol. 43(1), pages 25-53, January.
    • Handle: RePEc:tpe:jtecpo:v:43:y:2009:i:1:p:25-53
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    Citations

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    Cited by:

    1. Batarce, Marco & Ivaldi, Marc, 2014. "Urban travel demand model with endogenous congestion," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 331-345.
    2. Kraus, Marvin, 2012. "Road pricing with optimal mass transit," Journal of Urban Economics, Elsevier, vol. 72(2), pages 81-86.
    3. Hörcher, Daniel & Tirachini, Alejandro, 2021. "A review of public transport economics," Economics of Transportation, Elsevier, vol. 25(C).
    4. Souche-Le Corvec, Stéphanie & Mercier, Aurélie & Ovtracht, Nicolas & Chevallier, Amandine, 2019. "Urban toll and electric vehicles: The winning ticket for Lyon Metropolitan Area (France)," Research in Transportation Economics, Elsevier, vol. 73(C), pages 17-33.
    5. Ihab Kaddoura & Benjamin Kickhöfer & Andreas Neumann & Alejandro Tirachini, 2015. "Agent-based optimisation of public transport supply and pricing: impacts of activity scheduling decisions and simulation randomness," Transportation, Springer, vol. 42(6), pages 1039-1061, November.
    6. Gonzales, Eric Justin, 2011. "Allocation of Space and the Costs of Multimodal Transport in Cities," University of California Transportation Center, Working Papers qt7s28n4nj, University of California Transportation Center.
    7. Lindsey, Robin, 2012. "Road pricing and investment," Economics of Transportation, Elsevier, vol. 1(1), pages 49-63.
    8. Gonzales, Eric Justin, 2011. "Allocation of Space and the Costs of Multimodal Transport in Cities," University of California Transportation Center, Working Papers qt07x7h9pg, University of California Transportation Center.
    9. Batarce, Marco & Ivaldi, Marc, 2010. "Travel Demand Model with Heterogeneous Users and Endogenous Congestion: An application to optimal pricing of bus services," IDEI Working Papers 659, Institut d'Économie Industrielle (IDEI), Toulouse, revised Apr 2011.
    10. Guo, Ren-Yong & Szeto, W.Y., 2018. "Day-to-day modal choice with a Pareto improvement or zero-sum revenue scheme," Transportation Research Part B: Methodological, Elsevier, vol. 110(C), pages 1-25.
    11. Guo, Ren-Yong & Szeto, W.Y. & Long, Jiancheng, 2020. "Trial-and-error operation schemes for bimodal transport systems," Transportation Research Part B: Methodological, Elsevier, vol. 131(C), pages 106-123.
    12. Hörcher, Daniel & De Borger, Bruno & Graham, Daniel J., 2023. "Subsidised transport services in a fiscal federation: Why local governments may be against decentralised service provision," Economics of Transportation, Elsevier, vol. 34(C).
    13. Li, Zhi-Chun & Zhang, Liping, 2020. "The two-mode problem with bottleneck queuing and transit crowding: How should congestion be priced using tolls and fares?," Transportation Research Part B: Methodological, Elsevier, vol. 138(C), pages 46-76.
    14. Tirachini, Alejandro & Hensher, David A. & Rose, John M., 2014. "Multimodal pricing and optimal design of urban public transport: The interplay between traffic congestion and bus crowding," Transportation Research Part B: Methodological, Elsevier, vol. 61(C), pages 33-54.
    15. Beaudoin, Justin & Farzin, Y. Hossein & Lin Lawell, C.-Y. Cynthia, 2015. "Public transit investment and sustainable transportation: A review of studies of transit's impact on traffic congestion and air quality," Research in Transportation Economics, Elsevier, vol. 52(C), pages 15-22.
    16. Tirachini, Alejandro & Hensher, David A., 2011. "Bus congestion, optimal infrastructure investment and the choice of a fare collection system in dedicated bus corridors," Transportation Research Part B: Methodological, Elsevier, vol. 45(5), pages 828-844, June.
    17. Zhang, Fangni & Yang, Hai & Liu, Wei, 2014. "The Downs–Thomson Paradox with responsive transit service," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 244-263.
    18. Alejandro Tirachini & David Hensher & Michiel Bliemer, 2014. "Accounting for travel time variability in the optimal pricing of cars and buses," Transportation, Springer, vol. 41(5), pages 947-971, September.
    19. Jean-Philippe Meloche, 2019. "Towards a New Era in Road Pricing? Lessons from the Experience of First Movers," CIRANO Working Papers 2019s-35, CIRANO.

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