Bus Route Subsidy Method Based On Principal-Agent Theory

With the development of society recent years,the ratio of car travel is increasing rapidly,the urban traffic congestion and pollution problems increasing.For this country promulgated the "priority to the development of urban public transport" policy.To implement this policy successfully,it is necessary to raise the level of public transport services and increase the proportion of public transport trips.Based on this consideration,the government hopes to encourage the bus companies to improve the service level and increase the total social welfare through reasonable and effective subsidy policies.This paper focuses on the study of an effective incentive for public transport subsidy from the perspective of government regulators.First of all,this paper summarizes the advantages and disadvantages of the related research results of public transport subsidy at home and abroad from the aspects of the mechanism and mode of public transport subsidy,method and model of public transportation subsidy measurement,the bus subsidy mode and its influencing factors.It can use the Principal-Agent theory to design the bus contract,which could regulate the quality of the bus company.Then,with the objective of maximizing social welfare,choosing the frequency of service as the main index of service level,the incentive model can be formulated to regulate the bus route subsidy and optimize the service frequency for each route.The optimal subsidy,the optimal service frequency and the number of passengers are calculated correspondingly.The results of the study show that the bus company has the motivate to operate any necessary routes under this subsidy mechanism,and through the analysis of the analysis results,some suggestions are put forward for regulators and bus companies:(1)the government need to have a certain understanding of the cost of the bus market before the development of this contract,since the closer the unknown cost cap provided to the real cost,the higher the passenger welfare will get;(2)the bus company can reduce the management of operating costs without reducing the frequency of departure to improve their current income,and it could also improves the quality of other services to increase passenger effectiveness to improve the income level of the next period;(3)it could through the mathematical statistical method to determine whether the bus line needs to be improved;(4)to provide theoretical guidance for the selection of bus vehicles;(5)establish the post-inspection supervision system,and provide the mathematical support for the design of the contract award clause.At the same time,this paper compares the difference between the information symmetry and asymmetric subsidy scheme in the bus market,and shows that the value of the information and what kind of circumstances it is appropriate to spend cost supervision to monitor the cost information.By a specific analysis of each bus route,different amount of subsidy and frequency of planning are developed,so that each subsidy has a clear incentive objective.It could achieve better subsidies effect and with better universality.