In recent years, operating subsidies in the USA increased considerably in response to public concerns over traffic congestion and air quality. In a panel of more than 600 transit firms over the period from 1991 to 2012, we find no significant relationship between subsidy and ridership. We show that with a larger subsidy, a transit system operates a larger network but less intensively. At the same time, this subsidy influences service supply in such a way that the quality, as perceived by the traveller, suffers. This is reflected by lower costs of production.

Additional Metadata
Persistent URL hdl.handle.net/1765/102711
Journal Journal of Transport Economics and Policy
Citation
Reeven, P.V. (Peran Van), & Karamychev, V.A. (2016). Subsidies and US urban transit ridership. Journal of Transport Economics and Policy, 50(1), 1–20. Retrieved from http://hdl.handle.net/1765/102711