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User Economies of Scale Bus Subsidy in Adelaide


  • Tisato, P.


The current public transport policy focus in Adelaide is on the introduction of competitive tendering to improve productive efficiency, improve financial performance and reduce fiscal stress. Beyong this initiative, the question of public transport subsidy is also an issue of critical policy importance requiring attention (Tisato, 1996). In particular, what is the appropriate level of subsidy in Adelaide which can be justified on economic efficiency grounds? This paper contributes to the resolution of this questionby estimating optimal subsidy in Adelaide, South Australia based on user economies of scale (UES) argument for subsidy. The focus is limited to buses, the dominant mode of public transport in Adelaide (and most other Australian cities).

Suggested Citation

  • Tisato, P., 1996. "User Economies of Scale Bus Subsidy in Adelaide," Papers 96.6, South Australian Centre for Economic Studies-.
  • Handle: RePEc:fth:sauces:96.6

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    Cited by:

    1. Tisato, Peter, 1998. "Service unreliability and bus subsidy," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(6), pages 423-436, August.
    2. Gwilliam, Ken, 2008. "A review of issues in transit economics," Research in Transportation Economics, Elsevier, vol. 23(1), pages 4-22, January.

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    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy


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