What Affects Transit Ridership? A Dynamic Analysis involving Multiple Factors, Lags and Asymmetric Behaviour

Abstract

This study seeks to determine the relative impacts of various factors in affecting ridership, to quantify their short-run and long-run effects, and to test the symmetry in ridership in response to rises and falls in gasoline price and transit fare. The results show that the effect of gasoline price, albeit small, is significant, extends over a year and mainly derives from its rise not fall. Fare is most influential both in terms of short-term and long-term elasticities and its effect is largely contributed by fare increases. The combination of these two results points to the policy of increasing gasoline price over decreasing transit fare to encourage ridership. On the relationship between service and fare, the results support the ‘demand follows supply’ hypothesis. The results also provide empirical evidence that ridership responds differentially between a rise and a fall in gasoline price or transit fare.