This chapter aims at outlining pricing policy for public transport that maximizes the social surplus, that is, the sum of the producer surplus and the consumer surplus, while internalizing possible system-external costs. It starts by presenting the door-to-door transport cost as a key concept in price theory for public transport, and then first principles of optimal pricing valid for all modes of public transport are laid down. These principles are applied to urban (short-distance) public transport in sections 13.2–13.5 and to inter-urban (long-distance) public transport in section 13.6. Section 13.7 summarizes the methodological conclusions.

In this article the post war development of public transport demand in the town of Linköping is explained using time series analysis. It is found that the dramatic increase in public transport demand between 1946 and 1983, at least in part, can be explained by the rapid increase in female labour force participation and the expansion of the city’s outer areas. After that, female labour force participation decreased slightly and the town expansion has stopped. Without these positive forces to counterbalance the rising levels of car ownership public transport demand has fallen by 71%. The effects of a policy change, including peak-load pricing, straighter bus routes, smaller bus size and staggered school hours, is analysed. It is found that the proposed package would increase public transport travel by 42 % compared to present policy.

   In one volume, this book brings together a selection of the best papers presented at the 9th International Conference series on Competition and Ownership of Land Passenger Transport (known as the Thredbo Series). Thredbo is a premier international event that brings together academics, government policy makers, politicians, consultants and public transport operators to review the international developments in the theme area. As the most important international conference in this field of expertise, the series has more than 120 papers of well known authors and practitioners of Land Transport. Best papers from previous conferences were published in "T& F journal" and "Transport Reviews". Papers are reviewed and revised appropriately to ensure high quality. This book takes a practical approach by focusing on real world examples

Förutom i Stockholm uppvisar den lokala kollektivtrafiken en nedåtgående trend i trafikutvecklingen, trots en årlig subvention om 10 miljarder kronor. Drift av lokal kollektivtrafik i mindre och medelstora städer baserat på samhällsekonomiska kriterier skulle bl a medföra en prispolitik som kräver en subvention om drygt 50%. Att detta ungefär motsvarar rådande subventioneringsgrad är dock inte ett tecken på att kollektivtrafiken bedrivs på samhällsekonomisk grundval, eftersom det visar sig att prisstrukturen är grovt suboptimal. Vad gäller investeringspolitik framgår det dessutom av en enkätundersökning att trafikhuvudmännen inte använder samhällsekonomisk kalkyl (CBA) vid planering och drift av lokal kollektivtrafik, så syftet med avhandlingen är att visa på de möjligheter till förbättringar av den lokala kollektivtrafiken som skulle uppstå om den bedrevs på samhällsekonomisk grundval.

Operationaliseringen av teorin kräver först att några grundfrågor för en tillämpning av allmän välfärdsekonomisk teori på bedrivande av lokal kollektivtrafik benas upp. Det är väsentligt att göra en åtskillnad av utbudet av kollektiva transporttjänster mellan ett grundläggande utbud som är att betrakta som ”merit goods” och övrigt utbud där nyttan på normalt sätt mäts genom konsumenternas betalningsvilja.

I en omfattande fallstudie av den lokala kollektivtrafiken i Linköping exemplifieras vad effekten blir, dels av vissa utbudsförändringar, som har sållats fram i strävan mot systemoptimum, dels av ändamålsenlig efterfrågestyrning, och med CBA beräknas vad nettoresultatet kan tänkas bli. Om förbättringar som ger lika stor nettonytta som i Linköping kan göras hos flertalet andra trafikhuvudmän med en samhällsekonomisk ansats, skulle den totala nettonyttan aggregerad över hela Sverige vara betydligt större än vad vissa av de omskrivna jätteprojekten inom kollektivtrafiksektorn kan prestera.

Except in Stockholm, local public transport shows a declining trend in spite of an annual total subsidy from the County councils of 10 billion SEK. This is fair enough. Running local bus services in small and medium sized towns in accordance with welfare economic criteria implies among other things a pricing policy which requires subsidization just above 50%, which happens to be the same as the present degree of tax-financing. However, this is just a coincidence, and not a mark of optimality, because it is found that the structure of fares is clearly suboptimal. As regards investment policy it is furthermore confirmed by a questionnaire survey that neither the principals (the County councils) nor their agents (bus companies) use cost-benefit analysis (CBA) for the design of local public transport systems, so the purpose of the thesis is to demonstrate the potential improvements of public transport in small and medium sized towns run on the basis of welfare economics.

The operationalization of the welfare economic foundations requires some theoretical reorientation in the particular case of local public transport. A fundamental division of the supply is made between the “merit goods” part of total supply and the “normal goods” part, where benefit is measured by the individual willingness-to-pay.

In a case study of the bus transport system of Linköping a number of generally applicable minor improvements are found by the welfare economic approach, which aggregated to the national level would imply a total net benefit which more spectacular projects in the public transport sector rarely can present.

  In one volume, this book brings together a selection of the best papers presented at the 9th International Conference series on Competition and Ownership of Land Passenger Transport (known as the Thredbo Series). Thredbo is a premier international event that brings together academics, government policy makers, politicians, consultants and public transport operators to review the international developments in the theme area. As the most important international conference in this field of expertise, the series has more than 120 papers of well known authors and practitioners of Land Transport. Best papers from previous conferences were published in "T& F journal" and "Transport Reviews". Papers are reviewed and revised appropriately to ensure high quality. This book takes a practical approach by focusing on real world examples.