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Optimal fares and capacity decisions for crowded public transport systems

Author

Listed:
  • André de Palma

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris, ENS Cachan - École normale supérieure - Cachan)

  • Robin Lindsey

    (Sauder - Sauder School of Business [British Columbia] - UBC - University of British Columbia)

  • Guillaume Monchambert

    (ENS Cachan - École normale supérieure - Cachan)

Abstract

There is a large operations research literature on public transit system design. An extensive economic literature has also developed on public transit capacity investments, service frequency, and optimal pricing and subsidy policy. These two branches of literature have made significant advances in understanding public transit systems. However, in contrast to the literature on automobile traffic congestion, most of the studies have employed static models that cannot account for travelers' time-of-use decisions and the dynamics of transit congestion and crowding. The time profile of ridership is driven by the trade-off that users face between traveling at peak times and suffering crowding, and avoiding the peak by traveling earlier or later than they would like. A few studies have explored this trade-off using simple microeconomic models that combine trip-scheduling preferences as introduced by Vickrey (1969) with a crowding cost function that describes how utility from travel decreases with passenger loads. In this paper we use this modeling framework to analyze usage of a rail transit line, and assess the potential benefits from internalizing crowding externalities by setting differential train fares. We also present results on optimal train capacity and the number of trains put into service.

Suggested Citation

  • André de Palma & Robin Lindsey & Guillaume Monchambert, 2015. "Optimal fares and capacity decisions for crowded public transport systems," Post-Print hal-01223169, HAL.
  • Handle: RePEc:hal:journl:hal-01223169
    Note: View the original document on HAL open archive server: https://hal.science/hal-01223169
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    References listed on IDEAS

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    1. Haywood, Luke & Koning, Martin & Monchambert, Guillaume, 2017. "Crowding in public transport: Who cares and why?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 100(C), pages 215-227.
    2. André de Palma & Robin Lindsey & Guillaume Monchambert, 2017. "The Economics of Crowding in Public Transport," Post-Print hal-01203310, HAL.
    3. de Palma, André & Kilani, Moez & Proost, Stef, 2015. "Discomfort in mass transit and its implication for scheduling and pricing," Transportation Research Part B: Methodological, Elsevier, vol. 71(C), pages 1-18.
    4. André De Palma & Robin Lindsey & Guillaume Monchambert, 2015. "The Economics of Crowding in Public Transport," Working Papers hal-01203310, HAL.
    5. Tian, Qiong & Huang, Hai-Jun & Yang, Hai, 2007. "Equilibrium properties of the morning peak-period commuting in a many-to-one mass transit system," Transportation Research Part B: Methodological, Elsevier, vol. 41(6), pages 616-631, July.
    6. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-260, May.
    7. Prud'homme, Rémy & Koning, Martin & Lenormand, Luc & Fehr, Anne, 2012. "Public transport congestion costs: The case of the Paris subway," Transport Policy, Elsevier, vol. 21(C), pages 101-109.
    8. Mark Wardman & Gerard Whelan, 2011. "Twenty Years of Rail Crowding Valuation Studies: Evidence and Lessons from British Experience," Transport Reviews, Taylor & Francis Journals, vol. 31(3), pages 379-398.
    9. Kraus, Marvin & Yoshida, Yuichiro, 2002. "The Commuter's Time-of-Use Decision and Optimal Pricing and Service in Urban Mass Transit," Journal of Urban Economics, Elsevier, vol. 51(1), pages 170-195, January.
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    Cited by:

    1. Guillaume Monchambert & Stef Proost, 2019. "How Efficient are Intercity Railway Prices and Frequencies in Europe?: Comparing a Corridor in Belgium and in France," Journal of Transport Economics and Policy, University of Bath, vol. 53(4), pages 323-32-347.

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    Keywords

    public transport; crowding; pricing; optimal capacity;
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