HIGH PATRONAGE, LOW COST BUS SERVICES

The author uses an economic model of bus operations to study the trial deregulation of bus services in Hereford during 1981-84. The model gives estimates of bus patronage, revenue, expenditure, etc., for a geographical area in terms of the average fare and the number of bus vehicle-miles per year operated in the area, and in terms of the area's population, car ownership, and population density. The model was developed by the author using county-level data for 36 counties for 1982-3. Details of the population, car ownership, and population density of Hereford were used, together with the bus vehicle-miles and fare levels prevailing at different dates. The model operates in a broad-brush way: it does not take account of the details of the routes in any area, and it assumes average efficiency by bus operators. In November 1983 both public and private operators would have been making large losses. For both types of operator expenditure would have risen, owing to the extra vehicle-miles being operated, and revenue would have fallen, owing to the very low fares, in spite of the extra patronage. The model estimates that the public-sector operator would have been making a loss equivalent to 450000 per year, and the private-sector operators a loss equivalent to L219000 per year. Although the operators would have been making large losses in November 1983, the value of the gains to the passengers would have more than outweighed the losses to the operators, so that net economic benefit would have been up by 22%. Assuming that the model is correct, the operators would have incurred similar deficits in 1984.