Research On Urban Rail Transit Pricing Based On Ramsey Model

Urban rail transit is an important component of public transport, whose rational pricing can effectively regulate the public transport supply and demand condition, and has an important leverage effect on traffic regulation, Therefore, it has an important research and practical significance for how to price urban rail transit, and what pricing factors should be considered.The theoretical basis of this paper is maximize social welfare. Using Ramsey model based on cost function, we seek for second-best price and variables that influence the price level. We considered the impact of passenger traffic quantity on the cost to build a related function, and propose hypothesis 1 as the larger passenger traffic quantity the smaller the Ramsey pricing; we build model 2 by adding average trip length as a new variable to get the hypothesis 2 that the larger the average trip length the smaller the Ramsey pricing.We approach the OLS regression through 19 years data in Hong Kong. Regression coefficient at 95% confidence interval is significantly greater than zero for model 1, so the cost is significantly increased as long as the growth in passenger traffic quality. The larger the passenger traffic quality the lower the Ramsey price, that is, H1 has been testified for regression coefficient of variable minus 1 is smaller than 1; Regression coefficient at 95% confidence interval is significantly smaller than zero for model 2, thus, the larger the average trip length the lower the Ramsey price. So, the impact of both of the two variables on Ramsey pricing are negative.The innovation of this paper is to explore the effect of variables on Ramsey pricing in the cost function; we use econometric methods to process OLS regression for variables such as passenger traffic quality and average trip length respectively to get the influence condition, while quantitative Ramsey pricing and peak pricing are obtained; it is also an application for Ramsey pricing on Shenzhen metro. This paper has research and reference value for the application of Ramsey model and Shenzhen metro pricing.