Optimal Fares for Public Transport

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Optimal Fares for Public Transport
The fare planning problem for public transport is to design a system of fares that maximize the revenue. We introduce a nonlinear optimization model to approach this problem. It is based on a discrete choice logit model that expresses demand as a function of the fares. We illustrate our approach by computing and comparing two different fare systems for the intercity network of the Netherlands. 1 The Fare Planning Problem The influence of fares on passenger behavior and revenues is traditionally studied from a macroscopic point of view. Classical topics are the analytic study of equilibria [7], price elasticities [3], and the prediction of passenger behavior [1]. The only approaches to fare optimization on a more detailed level that we are aware of are the work of Hamacher and Schöbel [5] on the optimal design of fare zones and the work of Kocur and Hendrikson [6] and De Borger et al. [4] who introduced a model for maximizing the revenue and the social welfare, respectively. In cont...
Ralf Borndörfer, Marika Neumann, Marc E. Pfet
Added 28 Jun 2010
Updated 28 Jun 2010
Type Conference
Year 2005
Where OR
Authors Ralf Borndörfer, Marika Neumann, Marc E. Pfetsch
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