The Mohring Effect
Documento de Trabajo IE-PUC, N° 529, 2019.
Abstract: The Mohring Effect is the result that an increase in the demand for public transportation induces a decrease in the waiting time costs for all users when it is dealt with an increase in the frequency of the services. The use of the term Mohring Effect is also associated with other positive indirect effects of increased demand, such as an increase in route density that leads to reductions in access time costs. The Mohring Effect, which is, to some extent, analogous to a positive externality, is the most important argument from an economic efficiency standpoint for public transport subsidization. Recent empirical evidence shows that between 50% and 60% of the optimal subsidy for off-peak bus services in cities such as Washington, Los Angeles, and London is due to the Mohring Effect. The evidence also shows that the Mohring Effect is more significant for buses than rail and subways and for off-peak periods than for peak periods.
Keywords: Access time costs; Bus provision; Mohring Effect; Public transportation; Public transportation pricing; Public transportation subsidization; Urban transportation; Waiting time costs.