Handbook of Research Methods and Applications in Transport Economics and Policy
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Handbook of Research Methods and Applications in Transport Economics and Policy

Edited by Chris Nash

Transport economics and policy analysis is a field which has seen major advances in methodology in recent decades, covering issues such as estimating cost functions, modelling of demand, dealing with externalities, examining industry ownership and structure, pricing and investment decisions and measuring economic impacts. This Handbook contains reviews of all these methods, with an emphasis on practical applications, commissioned from an international cast of experts in the field.
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Chapter 13: Pricing public transport services

Jan Owen Jansson, Johan Holmgren and Anders Ljungberg


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.

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