Examining the Cost Structure of Urban Bus Transit industry: Does Urban Geography Help?


K Mert Cubukcu

Document Type

Journal Article

Publication Date


Subject Area

planning - signage/information, economics - operating costs, economics - economies of scale, technology - geographic information systems, place - urban, mode - bus, mode - mass transit


Urban transportation policy, Urban transit, Urban areas, Transit operating agencies, Transit lines, Public transit lines, Operating costs, Mass transit lines, Intracity bus transportation, GIS, Geography, Geographic information systems, Geocoding, Economies of scale, Cost of operation, Cost functions, Bus transit operations, Bus transit


The purpose of this paper is to expand empirical research on bus transit operation costs and test the hypothesis that physical and geographical characteristics are plausible explanatory cost factors. A translog cost function has been estimated, using a panel dataset of 1053 observations over 1996-2002 for a cross-section of 264 transit bus agencies in the US, combined with geographical and physical data processed with geographic information system technology. The results confirm the importance of geographical factors as determinants of bus transit costs. The trade-offs between geographical factors in shaping the frontier between economies and diseconomies of density are assessed. The implications of the results for public policy regarding competition are discussed.


Journal of Transport Geography home Page: http://www.sciencedirect.com/science/journal/09666923