Public Transport Subsidies In The UK: Evidence of Distributional Effects

Abstract

In this study, a travel propensity analysis is applied to data from the United Kingdom (1995-1997) to determine how much different population groups benefit from public transport subsidies. The travel propensity approach determines to what degree different population groups depend on public transport and hence how much they benefit more from public transport subsidies. General bus subsidies were found to predominantly benefit lower income households, women, and those aged below 24 or above 60. Railway subsidies, on the other hand, benefit the rich, the working age commuter and business travelers and the young adults making shopping, social and other trips. The distributional effects of bus subsidies have become more progressive over time. The opposite is evident for rail.

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