Incentive subsidy scheme design with elastic transport demand
Incentive subsidy scheme design with elastic transport demand
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DOI:
10.1002/atr.1253
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发表时间:
2014-12
影响因子:
2.3
通讯作者:
W. Zou;S. Mizokami
中科院分区:
文献类型:
--
作者:
W. Zou;S. Mizokami
SUMMARY Huge public transport subsidies caused by deficits have become a heavy financial burden on some local governments due to the decline of bus passenger numbers. It is essential to apply the performance-based contract to bus services considering maximization of social welfare. This paper constructs an incentive subsidy contract considering the decision-making powers of the service level and calculating the proper frequency elasticity aiming at two problems of performance-based contracts. Meanwhile, we consider a role of bus operators ignored by most researchers. Under the scheme, the decision-making power of the service level is discussed basedon fiveassumptions,andmeanwhile,busoperatorsaremotivatedtoreducecostandimproveservicelevel in the scheme. The case of the bus service of Arao city indicates that the optimal frequency equals to zero when bus operators decidefrequency.Ifbus operatorsdetermineefforts,theoptimaleffort also equalstozerowiththe goal of maximizing the profit. Also, bus operators can play their roles in lessening cost and improving service level to help bus operators and the local government achieve a win-win situation, which maximizes the social benefitinthissubsidyschemewhenallfactorsaredecidedbythegovernment.Copyright©2013JohnWiley& Sons, Ltd. External costs are incurred in urban areas that experience substantial levels of traffic congestion due to the increasing number of private cars. The existence of these external costs is reflected in governments around the world seeking more sustainable means of meeting passenger transport requirements, including support for public transport because of its capacity to meet social obligations and to reduce the external costs of private car use. Therefore, transit subsidies are necessary, given substantial economies of scale, in order to permit services to be set at a level that will result in reasonably efficient use of the public transport. Also, it is regarded as important to provide service for those who are unable to drive, in addition to helping cities find some relief from urban congestion and reducing fuel consumption. Although transit subsidies are necessary to lower the price of public transport and diminish discrimination, they have long been controversial. Pucher et al. [1] noted that costs and subsidies are jointly determined, as higher costs elicit more subsidies, which in turn induce higher costs. As a mechanism with a major objective of containing the cost to government of service provision, competitive tendering (CT) was proposed and applied. The CT contract attracted significant interest because of its attempt to apply responsibilities and incentives to contract operators to reduce cost. The three kinds of incentive contracts are gross-cost, net-cost, and cost-plus contracts. The gross-cost contract introduced in London is payment to the operator of a specified sum of provision of the specifi ed service for as pecified period, with all revenue collected being for the account of the government [2]. Under the net-cost contract, instituted to Hong Kong bus companies, revenues must cover cost and guarantee profit. Worcman [3] concluded that contract payments of