Public Transit Bus Procurement

The Role of Energy Prices, Regulation and Federal Subsidies

+ Shanjun Li, Jerry Nickelsburg


The U.S. public transit system represents a multi-billion dollar industry that provides essential transit services to millions of urban residents. We study the market for new transit buses. Unlike private vehicles, the fuel economy of public buses has not improved during the last thirty years. Our empirical analysis of bus fleet turnover and capital investment suggests that transit agencies: (1) do not respond to energy prices; (2) respond to environmental regulations; (3) prefer purchasing buses from local manufacturers; (4) exhibit significant brand loyalty effects; (5) favor domestically produced buses when the have access to more federal funding.


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Shanjun Li is an Assistant Professor at the Cornell University Charles H. Dyson School of Applied Economics and Management with primary interests in environmental and energy economics and empirical industrial organization. 

Jerry Nickelsburg is an Adjunct Full Professor at UCLA Anderson Forecast where he plays a key role in the economic modeling and forecasting of the National, and California economies and the Los Angeles, Bay Area and Southern California economies.

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