Public Transport in Low Density Areas

This chapter considers the challenges and solutions for public transport in low population density areas from an economic perspective. The lower demand density causes economic challenges for providing public transport due to relatively low revenues and cost recovery compared to public transport provision in urban areas. The on-going urbanization makes this challenge even more topical and difficult and sets decision makers to choose between lower service levels or higher trip fares to maintain cost recovery. The third option is to raise subsidies instead of fares, which would require increasing taxes and plausible arguments for having political acceptance. We present some essential results on these decisions of rural public transport provision, pricing, and subvention. Moreover, we consider economic appraisal methods and role of new technologies in provision of rural public transport.