Providing Optimal Pricing Model for Urban Bus Services (Tehran Case Study)

Authors
Akbar Hassanpoor 1
Mohsen Khezri 2
1 Kharazmin University
2 Boalee sina University
10.29252/jemr.10.38.181
Abstract
Utilities and services can be divided into two types of public and private goods in terms of the nature of pricing. Urban bus services are pure private goods that have positive externality. The Mohering effect is one of the most important externality of bus services, which in fact justifies the philosophy and nature of subsidies by the municipality and the government. In this study, monetary calculation models of Mohering effect was explained and an optimal pricing model is provided for urban bus services. The results show that the optimal pricing model differs sharply from the Tehran Municipality bus ticket pricing policy.The empirical estimation of the model also shows the large difference between the current prices and the subsidy payment with the optimal values ​​extracted from the proposed model.
Keywords
Private Commodity
Public Commodity
Mouhering Effect
Optimal Pricing of Bus Service
Optimal Subsidy
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