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The Effects Of Subsidies On Public Transit Long-Run Costs, Kofi Obeng, Wayne K. Talley, Christopher Colburn

Economics Faculty Publications

This paper investigates sources of public transit long-run cost increases attributable to transit subsidies. The sources include wage, vehicle capital price and service increases. Service expansion is found to be the major source. Transit cost increases related to subsidies are classified as input price, output and finance effects of these subsidies. Transit costs are more responsive to federal operating subsidies, followed in declining order by local operating, state operating and capital subsidies, respectively.