U.S. Department of Transportation
Federal Highway Administration
1200 New Jersey Avenue, SE
Washington, DC 20590
202-366-4000


Skip to content
Facebook iconYouTube iconTwitter iconFlickr iconLinkedInInstagram

Policy and Governmental Affairs

FHWA Home / Policy & Governmental Affairs / Conditions and Performance Report

Conditions and Performance Report. Appendix H.

Conditions and Performance Report
Appendix H—The Costs and Benefits of Transit

Conditions and Performance Chapter Listing

Conditions and Performance Home Page


Operating Costs by Policy Function

Benefits by Policy Function

 

Benefits by Policy Function

The benefits of transit can also be classified by policy function. Exhibit H-3 arrays transit's benefits across the three market niches. These benefits and the methodology used to derive them can be summarized as follows:

  • The benefits of basic mobility are estimated at $23 billion in 1995. These benefits are calculated using econometric consumer surplus analysis, and represent the difference between transit riders' willingness to pay for trips and the amount they actually do pay. This amount is unlikely to change significantly from year to year.
  • Exhibit H-3
    Transit's Estimated Benefits by Market Niche, 1995
    Source: FTA analysis of 1995 NPTS Database.

  • Location efficiency was estimated to be worth $20 billion in 1995. This calculation is based on hedonic measurements of property values relative to proximity to transit services, presumed to reflect inter alia auto ownership cost savings.
  • The benefits of congestion relief provided by transit are estimated at $15 billion in 1995. This estimate is based on the travel time savings from using transit and the cross price elasticities between auto travel on congested freeways and nearby rapid transit lines.

These measurements are imprecise, representing an aggregation of benefits across a variety of circumstances. However, the scale and relative benefit amounts among transit's market niches are consistent with economic theory and with the willingness of local taxpayers to persistently support transit in serving these niches as worthwhile public policy functions.

Exhibit H-4 summarizes the per-trip costs, subsidies, and benefits of transit, according to the public policy functions described earlier. With a per-trip benefit of $11.66, location efficiency transit services appear to generate the greatest return for the lowest subsidy ($0.85). The total net benefit of location efficiency in 1995 was $9.82 per passenger. Congestion relief generated the least net benefit, $3.07. Basic mobility produced a per-trip benefit in the intermediate range of $6.44.

Exhibit H-4
Per-Trip Summary of Transit's Economic Performance, 1995
Source: FTA analysis of 1995 NPTS Database.
previous
Page last modified on November 7, 2014
Federal Highway Administration | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000