Assessing Public Transport Fares in Denmark: An Optimal Welfare Approach

Abstract

Public fare policies are vital for creating efficient, equitable, and sustainable transport systems. This study optimizes a welfare function across flat and distance-based pricing strategies, analysing their distributional impacts and effects on equity. Using a comprehensive mode and destination choice model for weekday trips (<50km) in Denmark, we exhibit that a flat fare of 23 DKK (€3.08) would improve welfare and equity without introducing major operational changes. This is driven by consumer surplus gains and increased market shares of active modes for shorter distances and public transport for longer journeys. These mobility changes result in significant health benefits and reduced environmental costs. However, the socio-spatial distribution of welfare effects is uneven, with most gains seen in rural and suburban areas, and among younger and lower-income groups. Further institutional support may also be needed to help public transport recover from revenue losses.