This report describes the extension of an analysis of the effects of urban public transport operating subsidies made for the European Conference of Ministers of Transport in 1979. The data base for the analysis has been greatly expanded, and now includes aggregate time-series data from 16 countries over the period 1965 to 1982, and data from public transport operations in 117 individual cities in 11 countries, mainly over the period 1970-82. The study examined the statistical correlations between year-on-year changes in the level of subsidy and changes in many other aggregate indicators of operating performance, including fares, vehicle-kms operated, passengers carried, unit costs per vehicle-km and per passenger, vehicle-kms operated per employee and passengers carried per employee, the number of staff employed and the wages paid. The results were in agreement with those obtained before, that although increases in subsidy were reflected in reduced fares and improved service levels, and therefore higher patronage, as much as one half of the subsidy has been consumed by higher unit costs and relatively lower production per employee. The relationships identified in the study seem to have been stable over time. Time-lagged regression suggested that, in part, the increases in unit cost tended to occur after the increases in subsidy, rather than before. Since additional service seems to be provided at less than average cost, the close connection between subsidy and costs gives some cause for concern that the uses of subsidy are not being controlled as tightly as they might. (A)

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