EXPENSE PREFERENCE BEHAVIOR IN PUBLIC TRANSIT SYSTEMS
infrastructure - vehicle, economics - revenue, economics - operating costs, organisation - management, place - urban, mode - mass transit
Urban transportation, TSM, Transportation systems management, Transportation system management, Transit vehicle operations, Transit, Subsidies, Public transit, Operating revenues, Operating costs, Mass transit, Local transit, Intracity transportation, Expense preference behavior model, Costs, Cost of operation
This paper advances previous research that views transit systems as minimizing their after-subsidy costs. An expense preference behavior model in economics is used, and first-order conditions for the manager are derived. From the first-order conditions, it is formally shown that the decomposition of relative price inefficiency between management behavior and subsidies found in earlier work (Sakano et al, 1997) can be derived from a utility maximizing model, thus placing that decomposition within the shadow price literature. Extensions to the models to calculate expense preference are also presented. Results of the estimated models show that transit systems have expense preference for capital and not labor. This expense preference behavior increases total costs by about 15% and capital subsidies by about 20%.
Obeng, K, (2000). EXPENSE PREFERENCE BEHAVIOR IN PUBLIC TRANSIT SYSTEMS. Transportation Research Part E: Logistics and Transportation Review, Volume 36, Issue 4, p. 249-265.