Public Transit Costs Drop 70% Under Private Control

Gare Saint-Lazare Train Station, Paris, France

A new study published by the National Bureau of Economic Research demonstrates why capitalism is superior to socialism.

Examining the public and private provision of public goods like transit, Jerch et al find that the private provision of public transit costs an astounding 70 percent less in per-mile operating costs in comparison to when the government provides it.

The authors note that their findings are, “consistent with private enterprises operating at a lower cost and higher efficiency relative to their public counterparts.” Also, they found that full privatizaton could result in cost savings of $5.7 billion in 2011.

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They also found that laws which give unions stronger bargaining power are associated with considerably higher operating costs, meaning that union members are enriched at the expense of taxpayers.

Source: http://www.nber.org/papers/w22088.pdf

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