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Discuss whether or not a government should subsidise bus transport.

Quick Answer:

A subsidy is a benefit given to an individual, business, or institution, usually by the government.

The government should subsidise bus transport for several reasons

A subsidy will lower costs, it may encourage a rise in bus travel by reducing bus fares
It may reduce poverty, the poor tend to use buses more than the rich, they may enjoy better quality travel
Bus travel creates fewer external costs than car travel as it reduces pollution and traffic congestion
It may increase employment as it may increase labour mobility

The government should not subsidise bus transport for several reasons

It will involve an opportunity cost, the government might instead spend more on e.g. education. The government cant raise taxes
Bus companies may not pass on the subsidy to passengers.
Subsidies may make bus companies complacent as they do not try to keep their costs low. They may not improve quality
Rail transport may be more efficient may provide more social benefits and generate lower social costs

Mass transit (public transport ) is heavily subsidised in all parts of the world, especially in cities and large towns. This is done to give low earners access to employment opportunities, to provide social mobility for older people, to reduce road congestion and to reduce the adverse environmental impact of traffic. The benefits are to individuals and to the community as a whole.

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