Understanding Public Transit Ridership through Gasoline Demand: Case Study in San Francisco Bay Area, CA

The long trends of fuel price increase along with increasing transit ridership over the past few decades has been established by past transit research. However, in 2008, there has been a drastic drop in the prices of oil, which has had significant effects on consumption patterns of gasoline. The objectives of this paper are two folds; firstly to ascertain the nature of the gasoline-transit ridership relationship and secondly, to establish the empirical figures of cross demand gas price elasticity. The locality of San Francisco Bay Area was used to carry out such an analysis, with the BART, MUNI Light Rail and MUNI Bus services being analyzed. This study showed that gas prices indeed affect transit ridership in all forms, with elasticity values ranging between 0.0581-0.147, which are generally consistent with the aggregate national average of 0.12 for all modes of transport. Another key finding of the paper, contrary to past research, is that the elasticity values were higher for Bus and Light Rail compared to Heavy Rail and Light Rail being greater in value than Bus. Different regression models were also identified to be best suited for each transportation types. This paper also suggests that current transit authorities in the Bay Area do not adjust its service schedules in response to fluctuations of gasoline prices, and this could be important means of improving declining service standards. This paper also attempts to distinguish the substitution effect of public transit by analyzing the highway speed data in the same time period in the Bay Area.