IMPACTS OF SUBSIDIES ON THE COSTS OF URBAN PUBLIC TRANSPORT.

AS TRANSIT SUBSIDIES HAVE INCREASED BY A FACTOR OF 15 IN THE UNITED STATES DURING THE 1970S, THE ARTICLE ARGUES THAT SUBSIDIES HAVE INCREASED PROBLEMS OF PRODUCTIVITY AND COST IN MASS TRANSIT THUS UNDERMINING THE POTENTIAL BENEFITS OF SUBSIDIES. THE DISCUSSION REVIEWS NATIONWIDE TRENDS IN SUBSIDIES, COMPARES THEM WITH CHANGES IN PRODUCTIVITY AND COST INDICES, AND THEN USES MULTIPLE REGRESSION ANALYSIS ON A POOLED CROSS-SECTION SAMPLE OF 77 TRANSIT SYSTEMS IN 1979 AND 135 SYSTEMS IN 1980 TO MEASURE SEPARATE IMPACTS OF SUBSIDIES ON COSTS. RECOMMENDATIONS ARE MADE CONCERNING REVISIONS IN THE SUBSIDY PROGRAMME LIKELY TO ENCOURAGE MORE EFFICIENT USE OF SUBSIDY FUNDS.