The role of pricing in the Santiago Public Transport System

Abstract

The role of pricing a short run tool to induce efficiency in the transport system of Santiago is discussed. The spatial distribution of demand shows that both income and car ownership is discussed. The spatial distribution of demand shows that both income and car ownership are fairly concentrated in the northeast zone; however, transit trips account for two thirds of the total at a city wide level. Present pricing policy is shown to be quite inefficient from an overall viewpoint: car trips are underpriced, buses seem to charge more than the optimal fare, and underground railroad prices are rational within an internal logic only. It is shown that reaching a socially optimal pricing scheme seems to be politically unfeasible, but refusing to charge for congestion could generate second best prices which are unequitable given the spatial distribution of car ownership. As a compromise, a combination of congestion pricing, ridership maximizing fares (underground railroad) and a flat bus fare, seems to be a reasonable goal.