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Transportation Seminar Series
Marginal Cost Pricing and Subsidy of Transit

Nov 1, 2011 (2:00 - 2:50 p.m., IACC 422)

Recent economic conditions have forced public transportation agencies across the country to make significant changes to their service and fare structure. At the same time advocates are emphasizing the importance of transit and its role in community livability and sustainability. There are a number of possible justifications for subsidizing transit, including providing mobility for the underprivileged, the existence of subsidies to other modes of travel, or the possibility that transit operates under conditions of economies of scale. This research focuses on economies of scale and density as a rationale for subsidizing transit in small urban areas.

This seminar will present results from a survey of small urban transit agencies regarding recent changes in service levels, fares, and funding; discuss the rationale for subsidizing transit; present cost data for small urban transit systems; focus on economies of scale, marginal cost pricing, and transportation externalities; and present results from a cost model.

Jeremy Mattson, Associate Research Fellow, Small Urban & Rural Transit Center, Upper Great Plains Transportation Institute – NDSU

Jeremy began working with UGPTI as an associate research fellow in November 2007. He works with the Small Urban & Rural Transit Center (SURTC), conducting research on issues related to public transportation. His research areas have included alternative fuels, transit ridership, rural intercity transportation, and transportation issues related to aging, disabilities, and access to health care. He holds a B.A. degree in economics and business management and a M.S. degree in agricultural economics and is currently in the Transportation & Logistics Ph.D. program at North Dakota State University.

NDSU Dept 2880P.O. Box 6050Fargo, ND 58108-6050