Zhang, F orcid.org/0000-0003-3584-4679, Lindsey, R and Yang, H (2016) The Downs–Thomson paradox with imperfect mode substitutes and alternative transit administration regimes. Transportation Research Part B: Methodological, 86. pp. 104-127. ISSN 0191-2615
Abstract
The Downs–Thomson paradox (D–T paradox) occurs when expansion of a congested and untolled highway undermines scale economies of a competing transit service, leaving users of both modes worse off. The standard analysis of the D–T paradox is based on several stringent assumptions: fixed total travel demand, perfect substitutability between automobile and transit trips, and no transit crowding. This paper re-examines the paradox when these assumptions are relaxed while retaining the usual assumption that there is no congestion interaction between the modes. It also broadens consideration to alternative transit administration regimes. In the standard treatment the transit operator is obliged to cover its costs. In this paper we also study two other regimes: transit profit maximization, and system-wide welfare maximization with no financing constraint. We examine how the transit system operator responds to highway capacity expansion in each regime, and how this affects welfare for drivers and transit users. We show that in all regimes the full price of transit declines only if the full price of driving falls as well. Thus, drivers are more likely to benefit from highway expansion than transit riders. The D–T paradox cannot occur in the profit maximization or unconstrained welfare maximization regimes. In the traditional self-financing regime transit service deteriorates, but the D–T paradox is not inevitable. Numerical analysis suggests that it can occur only when automobile and transit trips are nearly perfect substitutes.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Keywords: | Highway expansion; Responsive transit service; Imperfect substitutability; Transit crowding; Downs–Thomson paradox |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Environment (Leeds) > Institute for Transport Studies (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 26 Sep 2017 10:51 |
Last Modified: | 26 Sep 2017 10:51 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.trb.2016.01.013 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:121542 |