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The Relationship Between Fare and Travel Distance

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  • Finn Jørgensen
  • John Preston

Abstract

This paper develops a model to examine how a transport operator who is concerned about both profit and consumer surplus will design a uniform fare scheme and the relationship between fare and travel distance within such a scheme. The paper also analyses how travellers' generalised cost are linked to trip length. It is shown that how fare and generalised cost relate to trip length is critically dependent on the weight the transport operator puts on profit and the assumptions made about the demand conditions. The model's results are discussed in the light of Norwegian data for bus and ferry transport. © 2007 LSE and the University of Bath

Suggested Citation

  • Finn Jørgensen & John Preston, 2007. "The Relationship Between Fare and Travel Distance," Journal of Transport Economics and Policy, University of Bath, vol. 41(3), pages 451-468, September.
  • Handle: RePEc:tpe:jtecpo:v:41:y:2007:i:3:p:451-468
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    Cited by:

    1. Farber, Steven & Bartholomew, Keith & Li, Xiao & Páez, Antonio & Nurul Habib, Khandker M., 2014. "Assessing social equity in distance based transit fares using a model of travel behavior," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 291-303.
    2. Jørgensen, Finn & Mathisen, Terje Andreas & Larsen, Berner, 2011. "Evaluating transport user benefits and social surplus in a transport market--The case of the Norwegian ferries," Transport Policy, Elsevier, vol. 18(1), pages 76-84, January.
    3. Jørgensen, Finn & Santos, Georgina, 2014. "Charges on transport – To what extent are they passed on to users?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 183-195.
    4. Huang, Di & Liu, Zhiyuan & Liu, Pan & Chen, Jun, 2016. "Optimal transit fare and service frequency of a nonlinear origin-destination based fare structure," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 96(C), pages 1-19.
    5. Clark, Derek J. & Jørgensen, Finn & Mathisen, Terje Andreas, 2011. "Relationships between fares, trip length and market competition," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(7), pages 611-624, August.
    6. Clark, Derek John & Jørgensen, Finn & Mathisen, Terje Andreas, 2014. "Competition in complementary transport services," Transportation Research Part B: Methodological, Elsevier, vol. 60(C), pages 146-159.

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