Optimizing the Subsidy Calculation Model of Urban Public Transport

Abstract

In recent years, to alleviate and resolve the traffic problems in China, the government introduced a series of policies to subsidize public transportation. Accordingly, to effectively implement these financial subsidies, the formulation of a scientific model of urban public transport subsidy calculation, strict control of the total amount of financial subsidies, and clear identification of subsidy targets are necessary. In this study, a linear dual model is developed based on the principle of resource allocation and the economic meaning of shadow prices. The public transportation system of a city in China is considered an example, and both public transport operators and public interest stakeholders are considered. The subsidy calculation for service quality improvement is established for public transportation operations and vehicle transformation. Based on the validation using the above example, the calculation result is found to approximate the actual value, indicating the feasibility of the proposed model. Finally, this article presents suggestions pertaining to subsidy mechanism, operating environment, and service quality as a reference for urban public transport subsidies.