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.