Urban Studies and Planning Commons^™

Fare Policy And Vertical Equity: The Trade-Off Between Affordability And Cost Recovery, Xavier J. Harmony

Journal of Public Transportation

Vertical equity and the maximization of farebox revenue are important but conflicting goals in the development of fare policy in the United States. Reducing fares for low-income riders reduces revenue for a transit agency, while increasing fares could disproportionately impact lower-income riders. This paper details this conflict, explores strategies that could account for both goals, and evaluates fare programs in the United States. Two types of low-income strategies are discussed: first generation strategies and targeted subsidy strategies. First generation strategies have several limitations that targeted subsidy strategies account for; first generation strategies focus more on supply, while targeted subsidy strategies …