CROWDING LEVELS AND FARE CLASSES IN PUBLIC TRANSPORT

Abstract

This paper investigates the correlation between crowding levels and fare classes on the railways. The study is restricted to fare class systems where there is no perceived difference between fare classes except for crowding levels. A two stage model is used. In the first stage, public transport management decides on a price and a capacity for each fare class. In the second stage, passengers decide which class they will use, anticipating each other's choices and therefore the crowding levels. This results in a Nash equilibrium: given the choice of all other passengers, no passenger can improve his lot by moving to another class. Public transport management acts as a Stackelberg leader since it can determine which Nash equilibrium will occur through its choice of prices and capacities. The model was used to simulate a situation with two types of passenger (rich and poor). In this situation quantitatively different crowding equilibria occur depending on the proportion of the population that is poor. The welfare implications of operating a two class system are discussed and compared to those of operating a one fare class system. It was found that whether a two class system is better from a welfare point of view than the one class system depends upon the percentage of the population that is poor. For the covering abstract of the conference see IRRD 851540.