Economic Preference and Attitudes Towards Alternative Ways to Finance Public Transport

University essay from Göteborgs universitet/Institutionen för nationalekonomi med statistik

Abstract: The public transportation system in the region of Västra Götaland elicits quick and efficient travel, while, simultaneously, decreasing the negative effects of driving. However, the system suffers from various problems, mainly fare-evasion. The importance of behavioral economics has recently been recognized in policymaking, and could be very useful for understanding travel behavior, and thereby developing a beneficial and accessible public transport system. This thesis investigates the relationship between economic preferences, and opinions on the financing of the system. We intend to put forward the possibilities of, and the reasons advocating for, Fare-Free Public Transport to be implemented in Västra Götaland, based on behavioral economic factors. Through a web survey, answered by residents of Västra Götaland, we measure degrees of altruism, cooperation, status-quo, and sunk-cost fallacy. We also elicit opinions on the functionality of public transportation, travel behavior, inclination to pay, and attitudes towards alternative ways of financing public transport. In order to answer our research questions, a literature review of examples of Fare-Free public transport implementations and regression analyses were conducted. The results show that behavioral factors greatly affect travel habits and opinions on how public transport should be financed and that a majority of respondents prefer a change in public transport financing. People exhibiting pro-social behavior tend to lean more towards tax-funded alternatives, while people exhibiting status-quo or sunk-cost behaviors tend to be negative towards any form of change. The alternative with the highest approval rate turns out to be earmarking and transferring all parking fees and fines to finance public transport.

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