Our econometric investigation yielded evidence of the
existence and magnitude of economies of scale and
density in the provision of rail rapid transit service. We
found that the derived cost functions were useful in
forecasting the costs of a new system that was not in the
original sample with plausible accuracy.
The cost functions are parameterized by the important
cost and output variables. They may be found to be
useful in sketching the operating costs of a new system
under various conditidns and for evaluating transit
alternatives.
While a fixed rail technology offers opportunities for
low unit cost operation, our investigation illustrates the
importance of dense utilization and large scale in exploiting
the economies of the fixed rail technologY. This
highl&hts the need for demand elements to be brought
into the analysis before project feasibility can be determined.
As other studies have shown, access and egress
costs are high for tixed rail systems under many land-use
circumstances making this technology a poor competitor
to rubber-tired technologies even under heavy demand
conditions (Institute for Defense Analyses, 1973; Pozdena,
1975). These alternatives to rapid rail should be
carefully evaluated before a transit project selection is
made.