Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

Abstract: This paper evaluates the impacts of different social welfare weights on fares and frequencies, optimized to maximize welfare for bus services in the small Swedish city of Uppsala, handling both congestion in streets and crowding in public transport. It represents choice between three modes; public transport, car and a combination of walking and cycling, two periods; peak and off-peak, two zones and three origin-destination combinations. Six scenarios are evaluated; the base year (2014), a welfare optimal combination without distributional concerns and welfare optimal policies for four different sets of welfare weights with various degrees of progressivity. The main results are that, compared to the welfare optimal scenario without distributional weights, increasing the welfare weights of the low-income group increases frequencies and reduces fares successively. Comparing the simulation results to the fares and frequencies in Uppsala in 2014, optimal frequencies with even the most far reaching distributional objectives are lower.

Keywords: Income distribution; Distributional weights; Optimization; Public transport; Welfare; Fares; Frequencies

JEL-codes: R10; R41; R48

31 pages, First version: March 23, 2018. Revised: March 30, 2020.

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