Evaluation of Horizontal Equity under a Distance-Based Transit Fare Structure

Document Type

Journal Article

Publication Date

2016

Subject Area

economics - fare revenue, economics - benefits, economics - pricing, policy - equity, policy - fares, ridership - elasticity, ridership - demand

Keywords

Equity, elasticity, fare structure, Gini index

Abstract

Horizontal equity requires equal distribution of investment/benefit/costs among equal members of society. In other words, a transit passenger should pay as much as he/she uses. This study evaluated the measure of fulfillment of this rule in a case study, developed a distance-based fare structure, and shows that justice is better served by switching to the proposed structure. Fare elasticity of demand and probability distribution of transit passenger trip lengths were investigated through a field survey. Although mainly used in the measurement of inequality in income or wealth, the Gini index and the recovery ratio (revenue to cost for each transit passenger) in evaluating equity were used in this study. Results show that the Gini index would decrease from 0.38 to 0.17 after switching from a flat to a distance-based structure. Assessment of the ratio of revenue per mile over cost per mile (RPM/CPM) shows that switching to a distance-based fare structure makes the RPM/CPM curve significantly flatter, which indicates more similarity among passengers. As a byproduct, the amount of change in demand and revenue of the transit system also were formulated.

Rights

Permission to publish the abstract has been given by the Journal of Public Transportation, copyright remains with them.

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