Abstract
Population decline is a pressing issue facing Japan and other developed countries. Local governments in Japan are seeking solutions to insure they meet the daily travel demands of the elderly. Although subsidy for local bus companies is a highly practical policy, a careful investigation to determine its reasonable level is required. This paper investigates the option price of local bus services, that is, the willingness of residents to pay to maintain the services and attempts to gain insights on a reasonable level of subsidy for local bus companies. A comparative analysis among age groups and different city size groups was made. The result showed that elderly residents show a higher option price value than younger and middle-age residents.
Highlights
Population decline and the aging of society are two pressing, contemporary issues in Japan [1,2]
The local bus service should be maintained in an aging society
This study focused on the option price (OP) of local bus services and compared its value among different city-size groups and age groups
Summary
Population decline and the aging of society are two pressing, contemporary issues in Japan [1,2]. For a sustainable society, the elderly’s daily travel demands should be met as part of basic insurance [14] For this reason, the evaluation of the public transport value will be a useful reference for government policy making. Local bus services are part of the basic transportation system in Japan, and they are used for daily travel. According to Japanese policy for public transport, government subsidy from both national and local governments does not cover the total deficit [17]. This makes it difficult for local bus companies to maintain their service, which is exacerbated by an aging society.
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