THE EFFECTIVENESS AND BENEFITS OF FINANCIAL SUPPORT FOR PUBLIC TRANSPORT

Passenger benefits resulting from subsidy of transit are higher service levels, limitations on fare increases, simplified fare systems and reduced rates for heavy users. Society benefits through reduced use of automobiles and less environmental degradation. The survey of 41 UITP operators indicates that subsidy has not adversely affected the efficiency of management since four performance indicators for bus operations have generally shown increases over the past two decades. Social cost-benefit analysis has shown that society continues to derive net benefits from subsidy even when farebox ratios are low and public support must be achieved through increased taxation. Techniques for insuring maximum value for subsidy and evaluating the benefits from a given level of public support would benefit from further development. Community benefits from subsidy must be more completely analyzed and it is suggested that the German system of social accounting should be investigated further. As the political pressure increases to show that subsidy of public transit is beneficial, techniques must be more sophisticated. Political intervention in transit management could ultimately be counterproductive if it involves such things as setting fares.