The dynamics of fare and frequency choice in urban transit

Ian Savage has just published a nice paper The dynamics of fare and frequency choice in urban transit in TR part A (so behind a firewall)

This paper investigates the choice of fare and service frequency by urban mass transit agencies. A more frequent service is costly to provide but is valued by riders due to shorter waiting times at stops, and faster operating speeds on less crowding vehicles. Empirical analyses in the 1980s found that service frequencies were too high in most of the cities studied. For a given budget constraint, social welfare could be improved by reducing service frequencies and using the money saved to lower fares. The cross-sectional nature of these analyses meant that researchers were unable to address the question of when the oversupply occurred. This paper seeks to answer that question by conducting a time-series analysis of the bus operations of the Chicago Transit Authority from 1953 to 2005. The paper finds that it has always been the case that too much service frequency was provided at too high a fare. The imbalance between fares and service frequency became larger in the 1970s when the introduction of operating subsidies coincided with an increase in the unit cost of service provision.

This research complements with the work of Brian Taylor on the problems of Transit Financing, as in his paper Unjust Equity

Federal subsidies of public transit, particularly transit operations, are declining and the responsibility for supporting transit is falling increasingly on states and localities. In California, the Transportation Development Act (TDA) has become the state’s principal source of transit operating subsidies. It is found that the strict per capita allocation formulas of the TDA strongly favor lightly patronized suburban transit service over more heavily patronized service in the central cities. Transit riders in San Francisco, for example, receive a TDA subsidy of $0.13 per trip, whereas the TDA subsidy to transit patrons in suburban Livermore is over $5.00 per trip. The built-in suburban bias of the TDA is the result of partisan compromises made to secure passage of the Act in 1971–compromises to assuage a Republican governor opposed to new taxes–and to include the interests of rural and suburban counties. The result has been a proliferation in California of new, well-funded, and expanding suburban transit operators that attract few riders whereas older, heavily patronized central city transit operators are forced to cut service because of funding shortfalls. This paper concludes by proposing a more efficient and equitable method for allocating TDA funds than the current formula, which, in the name of equity, provides all Californians with a “fair share” of public transit whether or not they use it.

So it appears from Savage’s work there is too much temporal coverage in Chicago, and from Taylor’s too much spatial coverage in California.