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Transit Pricing

By Matthew Yglesias on October 9, 2009 at 3:00 pm

"Transit Pricing"

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I rode the Copenhagen Metro today and damn was it expensive—about $4 for the cheapest available (i.e., two zone) single ticket. That left me scratching my head as to why you would possibly put the fare so high. It turns out, however, that if you buy tickets ten at a time you get almost a 40 percent discount.

That’s much more reasonable, but it still strikes me as high. In general, cities everywhere seem to me to tend to charge too much for fares. The marginal cost of an additional passenger is extremely low—running a half full train costs the same as running a 75% full train—so basic economic logic indicates that the price of riding should also be very low. If the concern is that you shouldn’t have everyone’s tax dollars going to subsidize something that not everyone can take advantage of then the best solution might be to have a special tax on property located near metro stations. At the end of the day, getting more people to ride a system you’ve already built is beneficial even to the people who don’t ride it. In DC, for example, if people stopped taking Metro you’d have terrible traffic jams. Even someone who never rides Metro is benefiting from the fact that other people do ride it.

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