An Investigation of the Effect of Government Subsidy Scheme to Bus Industry on the Efficiency of Inner-City Bus Route System

Abstract

This study is focused on the effect of reformation of public transportation system on the efficiency of bus route system as a result of change of government subsidy scheme. Two types of government subsidy scheme has been considered and before and after analysis by Data Envelopment Analysis technique has been carried out for bus routes in Ulsan Metropolitan City. The analysis output has shown that there is no clear evidence to clarify the relationship between the change of government subsidy scheme and the efficiency of bus route system. There are two types of backgrounds may be suggested for this situation such as more longer period necessary to identify the policy effect and limitation to increase the number of passenger in a provincial city. Tobit regression analysis has also been conducted to discover the most effective variables for maximum efficiency and three variables including route length, frequency per vehicle per day, and headway are found to be influential. It is also seen that strategy to minimising input factors and service upgrade plan such as shortened route length and headway, increasing frequency per vehicle are necessary to develop the efficiency of bus routes operated in Ulsan city.