The pricing of any good or service plays an important role in the allocation of resources within an economy. For this reason it can determine the levels of social welfare that are achieved. In addition it will have effects on profit levels in firms and industries, as well as the distribution of income within society.
This thesis examines the pricing of urban bus transport, with particular attention being paid to the city of Brisbane. The problems that exist I in urban transportation will be examined. Travel demand is also important for pricing, as are the costs accrued by the supplier of the transport service. Various objectives in price setting are considered, and pricing under 'first-best' (marginal cost pricing) conditions and 'second best' conditions will be examined. Other important topics covered include peak/off peak pricing and transport subsidy. Mention will also be made of service levels, because pricing and the 'level of service' are inexorably linked. Conclusions will make use of simple estimates of costs and demand, and recommendations for pricing will be presented, based on these.