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Government Subsidies and Bus Transport


Discuss whether or not a government should subsidise bus transport.


Public Finance and Government Intervention

Preview Answer


I. Introduction
- Definition of subsidy
- Importance of bus transport

II. Reasons why the government should subsidize bus transport
- Lower costs and reduce bus fares
- Reduce poverty and improve quality of travel for the poor
- Fewer external costs compared to car travel
- Increase employment and labor mobility

III. Reasons why the government should not subsidize bus transport
- Opportunity cost and limited government resources
- Bus companies may not pass on the subsidy to passengers
- Subsidies may make bus companies complacent and not improve quality
- Rail transport may be more efficient and provide more social benefits

IV. The benefits of subsidizing mass transit
- Access to employment opportunities for low earners
- Social mobility for older people
- Reduce road congestion and adverse environmental impact of traffic
- Benefits to individuals and the community as a whole

V. Conclusion
- Summary of the main points
- Importance of balancing the benefits and costs of subsidies
- Call to action for policymakers to consider the impact of subsidies on bus transport.

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