PRICING PUBLIC TRANSPORT : THE CASE OF THE MRT

Abstract

This research set forth to investigate the pricing policy adopted by Singapore Mass Rapid Transit (SMRT). The objective of this study is to detect the existence of cross­ subsidization within its price structure. The cost test condition used in this study is, "If a passenger is paying less than what it cost SMRT to provide, then cross-subsidization probably exists. This study is empirical in nature and its development was based on the ridership demand data collected from SMRT. A data construction process was carried out in two phases to aid my analysis. The empirical findings suggest that short-haul passengers are cross-subsidizing long-haul passengers.