Benefits of Changes in Urban Public Transport Subsidies in the Major Australian Cities*

This paper considers the economic efficiency benefits of urban public transport subsidies and presents estimates of the marginal benefits of fare and service level changes in the main Australian cities. Models to evaluate benefits are outlined, and estimates compared of the benefits to public transport and other road users of fare and service level changes in different cities. A major conclusion is that existing urban public transport subsidies might be more effective from an economic efficiency point of view if frequency levels were reduced and the consequent cost savings used to finance lower levels of fares.