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Socially optimal fares and frequencies for urban bus services in small cities


  • Asplund, Disa

    (CTS - Centre for Transport Studies Stockholm (KTH and VTI))

  • Pyddoke, Roger

    (CTS - Centre for Transport Studies Stockholm (KTH and VTI))


This paper evaluates welfare effects of optimization of fares and frequencies for bus services in small cities. The model used takes into account both congestion on streets and crowding in public transport vehicles, and is calibrated with data for the Swedish city of Uppsala. Four policies are evaluated: optimal fares with unchanged baseline frequencies, optimal frequencies with unchanged baseline fares, simultaneous optimization of fares and frequencies, and finally a so-called Pareto scenario where frequencies and fares are optimized subject to the condition that no consumer group (defined by zone, time period, and origin-destination pair) should be worse off in terms of generalized cost of each trip. The results indicate that there would be large, robust welfare gains from reducing public transport supply in Uppsala, especially in the outer zone of the city where reductions of supply compared with the current situation are large. The welfare gains from adjusting fares would be smaller. The large reductions in consumer welfare in the welfare optimum, however, are likely to be controversial. In the Pareto scenario, almost all potential social welfare gains from the welfare optimal scenario are achieved with no consumer in any zone or time period being worse off compared with the baseline policy. In this scenario, the total number of public transport passengers is increased and emissions are reduced compared with the current situation.

Suggested Citation

  • Asplund, Disa & Pyddoke, Roger, 2018. "Socially optimal fares and frequencies for urban bus services in small cities," Working papers in Transport Economics 2018:1, CTS - Centre for Transport Studies Stockholm (KTH and VTI), revised 19 Feb 2018.
  • Handle: RePEc:hhs:ctswps:2018_001

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    References listed on IDEAS

    1. Pyddoke , Roger & Norheim, Bård & Betanzo , Mari Fossheim, 2017. "A model for strategic planning of sustainable urban transport in Scandinavia: a case study of Uppsala," Working papers in Transport Economics 2017:7, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    2. Börjesson, Maria & Fung, Chau Man & Proost, Stef, 2017. "Optimal prices and frequencies for buses in Stockholm," Economics of Transportation, Elsevier, vol. 9(C), pages 20-36.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Public transport; bus; demand model; fares; frequencies; supply; optimization; urban; welfare;

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • 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

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