What question did this study set out to answer?

The study develops a model to identify optimal subsidies for public transport fare and speed.

February 28, 2026

Optimal Subsidies for Public Transport

Key Points

The study develops a model to identify optimal subsidies for public transport fare and speed.
Developed a mathematical model for fare subsidies and transit speed
Analyzed the relationship between social and private costs in transport
Assessed thresholds for significant improvements in transit
No significant improvement until marginal social cost is at least 80% higher than private cost
Optimal subsidies for fare and speed depend on cost comparisons
Identified specific ratios for effective subsidy implementation

Abstract

Professor Jackson presents a model for determining (1) optimal fare subsidies and (2) optimal subsidies for increasing transit speed. He concludes that no significant improvement is apparent unless marginal social cost per car passenger mile is at least 80 per cent above private cost in the highway sector.

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