Subsidization of urban public transportation systems is often motivated by economies of scale and second-best considerations such as an underpriced road alternative. We model a public transit line subject to frictions between users (in-vehicle crowding), users and vehicles (boarding and alighting delays), and vehicles (congestion). We derive the profit- and welfare-maximizing provisions of supply. We show that if demand exceeds a first threshold, the system enters a congested regime and service frequency decreases. Beyond a second threshold, the strong deterioration of service quality causes the transit line to operate under diseconomies of scale, calling for a Pigouvian tax instead of a subsidy. This finding, which goes against Mohring’s classical rule (1972), holds with an untolled road alternative, provided that the network structure remains constant. We estimate the model for the London Piccadilly line and find evidence of substantial diseconomies of scale during the morning peak, adding up to −1.49 £/trip for the observed provision of service quality (-0.61 £/trip at optimum). These results question current subsidy policies for the busiest transit lines.
Diseconomies of scale and subsidies in urban public transportation
Résumé
en
Subsidization of urban public transportation systems is often motivated by economies of scale and second-best considerations such as an underpriced road alternative. We model a public transit line subject to frictions between users (in-vehicle crowding), users and vehicles (boarding and alighting delays), and vehicles (congestion). We derive the profit- and welfare-maximizing provisions of supply. We show that if demand exceeds a first threshold, the system enters a congested regime and service frequency decreases. Beyond a second threshold, the strong deterioration of service quality causes the transit line to operate under diseconomies of scale, calling for a Pigouvian tax instead of a subsidy. This finding, which goes against Mohring’s classical rule (1972), holds with an untolled road alternative, provided that the network structure remains constant. We estimate the model for the London Piccadilly line and find evidence of substantial diseconomies of scale during the morning peak, adding up to −1.49 £/trip for the observed provision of service quality (-0.61 £/trip at optimum). These results question current subsidy policies for the busiest transit lines.
Auteur(s)
Nicolas Coulombel1
, Guillaume Monchambert2, 3, 4
1
LVMT -
Laboratoire Ville, Mobilité, Transport
( 581044 )
- 6 et 8 avenue Blaise Pascal - Cité Descartes, Champs sur Marne - F-77447 Marne la Vallée Cedex 2
- France
École des Ponts ParisTech ( 301545 )
;
Université Gustave Eiffel ( 580722 )
2
Université de Lyon
( 301088 )
- 92 rue Pasteur - CS 30122, 69361 Lyon Cedex 07
- France
3
UL2 -
Université Lumière - Lyon 2
( 33804 )
- 86, rue Pasteur - 69007 Lyon
- France
D - Microeconomics/D.D4 - Market Structure, Pricing, and Design/D.D4.D42 - Monopoly
D - Microeconomics/D.D6 - Welfare Economics/D.D6.D62 - Externalities
H - Public Economics/H.H2 - Taxation, Subsidies, and Revenue/H.H2.H24 - Personal Income and Other Nonbusiness Taxes and Subsidies
J - Labor and Demographic Economics/J.J1 - Demographic Economics/J.J1.J13 - Fertility • Family Planning • Child Care • Children • Youth
R - Urban, Rural, Regional, Real Estate, and Transportation Economics/R.R4 - Transportation Economics/R.R4.R41 - Transportation: Demand, Supply, and Congestion • Travel Time • Safety and Accidents • Transportation Noise
R - Urban, Rural, Regional, Real Estate, and Transportation Economics/R.R4 - Transportation Economics/R.R4.R48 - Government Pricing and Policy
Voir aussi
https://hal.science/hal-02373768v1
Mots-clés
en
Congestion, Mass transit, Externality, Mohring effect, London Piccadilly line
Nicolas Coulombel, Guillaume Monchambert. Diseconomies of scale and subsidies in urban public transportation. Journal of Public Economics, 2023, 223, pp.104903. ⟨10.1016/j.jpubeco.2023.104903⟩. ⟨halshs-04112216⟩