Benefit/Cost of Public Transit

When considering public transit we tend to focus on the subsidy cost to the taxpayer and overlook the possible economic benefits that might accrue from the existence of the system. Studies have shown that in fact the financial benefits accruing to the community considerably outweigh the subsidy cost, usually expressed as a Benefit/Cost ratio.

A landmark study, Assessment of the Economic Impacts of Rural Public Transportation, was conducted in 1999 for the U.S. Department of Transportation in which twenty-two bus transit systems were studied. Overall the B/C ratio ranged from 4.22 to 1.67.

A study in Quebec conducted in six counties in the region showed B/C ratios ranging from 1.75 to 0.73.

Who are the "Beneficiaries"in the Benefit-Cost equation? We can classify them as follows:

The following table outlines typical benefits.

Individuals
  • Those without ready access to private transportation:
    • improved access to education, leading to improved opportunities for employment
    • incentive to remain in a rural home, saving cost (and stress) of relocation to a town
    • access to more shopping alternatives, leading to improved utilization of money
    • Savings in taxi cost when a trip is absolutely necessary (Note: displaced taxi drivers can drive buses.)
  • Those in two-car families:
    • possibility of saving the expenses of ownership of a second vehicle
the Community
  • Improved prosperity of individuals, businesses, and institutions, hence collective prosperity
  • Attraction of more residents, especially young families, fostering rural schools, volunteer fire departments; sustainable community initiatives and supporting agrarian activity
    • .
  • Healthy retention of long-time residents
Institutions

example - Community Colleges
  • More income from students funded through Federal and Provincial incentives.)
Local Governments
  • Influx of educational incentive dollars, transferred from other governments, into the local economy.
  • Improved tax base if new businesses locate as general prosperity and economic climate improve.
  • Retention of residents, hence tax income.
Provincial government
  • Reduced cost of transportation subsidies for medical purposes
  • Improved access for individuals to medical, dental, eye care, mental health and other professional services contributes to prevention of illness and improved management of health -- more affordable than the treatment of illness.