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Title: Subsidies in public transport
Authors: van Goeverden, Cees
Rietveld, Piet
Koelemeijer, Jorine
Peeters, Paul
Keywords: SubsidiesFree of chargeProfitablePublic transport
Issue Date: 2006
Publisher: EUT Edizioni Università di Trieste
ISTIEE Istituto per lo studio dei trasporti nell’integrazione economica europea
Source: Cees van Goeverden, Piet Rietveld, Jorine Koelemeijer, Paul Peeters, "Subsidies in public transport", in: European Transport / Trasporti Europei, XI (2006) 32, pp. 5-25.
Series/Report no.: European Transport / Trasporti Europei
XI (2006) 32
The pricing of public transport may range from charging the full price to supplying it for free. The
present situation in most European countries is between the two extremes implying a partial cost
recovery. In this paper we will explore both extremes on the axis of cost recovery: free public transport,
and public transport without subsidies.
We start with a discussion of free public transport, and give a short survey of the intentions
governments may have with its introduction. After this short survey we discuss in more detail the
experiences with free public transport in four real world cases, two from Belgium and two from the
Netherlands: the city of Hasselt, the Brussels region (for students), the Leiden-The Hague bus corridor,
and free public transport for students in The Netherlands.
Then we discuss the other extreme: public transport without subsidies. We start with a short overview
of the financial performance of the Dutch public transport systems and an analysis of the impacts of
measures to improve the benefit-cost ratios. Then the effects of subsidy suspension in the Netherlands are
estimated by developing two scenarios that describe opposite extremes in the hypothetical situation that
no subsidies are granted to public transport operators and comparing the outcomes with a reference
scenario where continuation of subsidies is assumed.
The paper concludes with a discussion of the merits and problems of both pricing policies: free public
transport and public transport without subsidies.
Type: Article
ISSN: 1825-3997
Appears in Collections:European Transport / Trasporti Europei (2006) 32/XI

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