Income-based Fare Orientation in Urban Public Transportation Services in Developing Countries: A case study in Hanoi, Vietnam

Abstract

In order to promote public transport ridership and to seek an option for funding public transport, the policymakers should consider a public transport with high-quality services that is suitable and attractive to high-income people like BRT. With the hypothetical profit from the high-quality service, a cross-subsidize might be given to ease the burden of subsidy for the regular public transport. In this paper a case study in Hanoi city, Vietnam was chosen to do SP/RP combined survey and then develop a multinomial logit model. The result showed that the high-income group has the highest willingness to pay for additional public transportation services of BRT, yet their main interest is limited (2 out of 5 additional services). The intermediate-income group has a considerable interest in almost all services (4 out of 5 services). The consumers’ surplus for BRT existed; therefore, a cross-subsidized system for public transport is possible in this case.