Wednesday, December 15, 2010

Elasticity of transportation demand with respect to service

The two biggest determinants of bus ridership are the hours of operation and the price.  Here is evidence from a natural experiment in Atlanta: the month after it cut bus hours by 10 percent and rail by 14 percent, MARTA lost a heap of riders....In October, people took 37,000 (0.5%) fewer train trips than they did in September, and 325,000 (5.6%) fewer bus trips.

Interestingly, the size of the ridership declines were smaller than the cutbacks in hours of service.  This must mean either that MARTA cut back only during the unpopular times, or that riders substituted rides during the cancelled times to rides during the remaining times.

The article says also that prices went up, so this may not be as clean of a natural experiment because two things are changing at once, so it is hard to infer which is causing the change.

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