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The economics of crowding in rail transit

Author

Listed:
  • André de Palma

    (ENS Cachan - École normale supérieure - Cachan, Centre de Recherche en Économie et Statistique (CREST) - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique)

  • Robin Lindsey

    (Sauder - Sauder School of Business [British Columbia] - UBC - University of British Columbia [Canada])

  • Guillaume Monchambert

    (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)

Abstract

We model trip-timing decisions of rail transit users who trade off crowding costs and disutility from traveling early or late. With no fare or a uniform fare, ridership is too concentrated on timely trains. Marginal-cost-pricing calls for time-dependent fares that smooth train loads and generate more revenue than an optimal uniform fare. The welfare gains from time-dependent fares are unlikely to increase as ridership grows. However, imposing time-dependent fares raises the benefits of expanding capacity by either adding trains or increasing train capacity. We illustrate these results by calibrating the model to the Paris RER A transit system.

Suggested Citation

  • André de Palma & Robin Lindsey & Guillaume Monchambert, 2017. "The economics of crowding in rail transit," Post-Print halshs-01654975, HAL.
    • Handle: RePEc:hal:journl:halshs-01654975
    DOI: 10.1016/j.jue.2017.06.003
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    Keywords

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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
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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