Work

Welfare-optimal public transport fares in Denmark

Year: 2025

Type: article

Abstract: Public transport fare policies are important in shaping efficient, equitable, and sustainable transportation systems. In this study, we optimise a welfare function across a spectrum of flat and distance-based pricing strategies while also analysing the distributional impacts and effects on equity. The analysis reveals that a Danish distance-based fare system replicating the current prices is sub-optimal from both a welfare economic and equity perspective. Using a comprehensive demand model for weekday trips (under 50km) in Denmark, we demonstrate that a flat fare of 23 DKK (€3.08), would improve welfare and equity without causing significant operational changes. Effects are driven by consumer surplus gains and increasing market shares of active modes for shorter distances and public transport for longer distances. These mobility changes yield significant health benefits for the population and reduce environmental costs. Nevertheless, the socio-spatial distribution of welfare effects is uneven, with most gains observed in rural and suburban areas and across younger and lower-income groups.

Source: Transportation Research Part A Policy and Practice

DOI: 10.1016/j.tra.2025.104790

Authors: Dimitrios Argyros, Anders Fjendbo Jensen, Jeppe Rich

Institution: Technical University of Denmark

Language: English

Topic: Transportation Planning and Optimization

Subfield: Transportation

Field: Social Sciences

Domain: Social Sciences

SDGs: Sustainable cities and communities, Reduced inequalities, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $3,270