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Measuring the Decline in Transit Productivity in the U.S

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  • Lave, Charles

Abstract

Starting in the mid-1960's, US government policy encouraged the public takeover and subsidy of what had been a self-supporting, privately owned transit industry. The combination of public ownership and subsidy halted the long-term decline in ridership, but it also led to the growth of an enormous financial deficit. Using individual data from 62 transit properties to measure the change in productivity (output per dollar of input) over the period 1950-1985, this paper examines the relationship between productivity and government subsidies. The magnitude of the productivity decline surprising: indeed, if productivity had merely remained constant since 1964, the year the subsidy program began, total operating expenses would be more than 40% lower. To put that figure in perspective, this is enough cost reduction to erase most of the current operating deficit -- without raising fares.

Suggested Citation

  • Lave, Charles, 1991. "Measuring the Decline in Transit Productivity in the U.S," University of California Transportation Center, Working Papers qt63g5j4z4, University of California Transportation Center.
    • Handle: RePEc:cdl:uctcwp:qt63g5j4z4
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    References listed on IDEAS

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    1. John R. Meyer & José A. Gómez-Ibáñez, 1980. "Measurement and Analysis of Productivity in Transportation Industries," NBER Chapters, in: New Developments in Productivity Measurement and Analysis, pages 293-332, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Jeffrey Brown & Gregory Thompson, 2008. "Examining the influence of multidestination service orientation on transit service productivity: a multivariate analysis," Transportation, Springer, vol. 35(2), pages 237-252, March.
    2. Jerch, Rhiannon & Kahn, Matthew E. & Li, Shanjun, 2017. "The efficiency of local government: The role of privatization and public sector unions," Journal of Public Economics, Elsevier, vol. 154(C), pages 95-121.
    3. Clifford Winston, 2000. "Government Failure in Urban Transportation," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 403-425, December.
    4. James Odeck & Abdulrahim Alkadi, 2001. "Evaluating efficiency in the Norwegian bus industry using data envelopment analysis," Transportation, Springer, vol. 28(3), pages 211-232, August.
    5. Giuliano, Genevieve & Moore, II, James E. & O'Brien, Thomas & Golob, Jacqueline, 2002. "San Gabriel Valley Smart Shuttle Technology (SGVSST) Field Operational Test Evaluation: Final Report," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt5f81z97k, Institute of Transportation Studies, UC Berkeley.
    6. Odeck, James, 2006. "Congestion, ownership, region of operation, and scale: Their impact on bus operator performance in Norway," Socio-Economic Planning Sciences, Elsevier, vol. 40(1), pages 52-69, March.

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