The economics of seat provision in public transport

Seated and standing travelling imply significantly different experience for public transport users. This paper investigates with analytical modelling and numerical simulations how the optimal seat supply depends on demand and supply characteristics. The paper explores the implications of seat provision on the marginal cost of travelling as well. In crowded conditions, we distinguish two types of external costs: crowding density and seat occupancy externalities. We derive, using a realistic smart card dataset, the externality pattern of a metro line, and identify the distorting role of the occupancy externality that makes the welfare maximising fare disproportionate to the density of crowding.