A Town Weighs a New Bus Route
A town of 18,000 residents is considering a new bus route connecting a residential neighborhood to a job center. The route would cost $240,000 per year to operate. A survey of 600 residents found that 62% would use the bus at least once a month, but the survey was conducted only at the job center during weekday mornings. Town planners estimate that a realistic ridership would be about 900 rides per month. Bus fares would be $2.00 per ride. Some council members cite the 62% figure as proof of strong support; others argue the survey is misleading and that the route would run at a large loss.
1. Evaluate the council members' use of the 62% figure and explain why the survey may not represent the town.
Read the worked answer
The 62% figure comes from a sample of 600 people surveyed at the job center on weekday mornings. That location and time select for people who already commute to that job center, so they are more likely than the general population to find a bus route useful. The sample is therefore biased toward support, and 62% of this group cannot be generalized to all 18,000 residents. The council members are treating a self-selected, location-specific sample as if it were a random sample of the town. A more defensible reading is that support may exist among job-center commuters, but the town needs a broader survey before claiming townwide support.
2. Using the planners' estimate of 900 rides per month at $2.00 per ride, calculate annual fare revenue and compare it with operating cost. Then explain what the comparison does and does not prove.
Read the worked answer
Monthly revenue is 900 times $2.00, or $1,800. Annual revenue is $1,800 times 12, or $21,600. Operating cost is $240,000 per year. The route would recover $21,600 of $240,000, or 9% of its cost, leaving a shortfall of $218,400 per year. This shows the route would not pay for itself through fares at the estimated ridership. It does not by itself prove the route is a bad idea, because public transit is often subsidized for benefits such as access to jobs, reduced traffic, or lower emissions. The calculation informs the debate but does not settle whether those benefits justify the subsidy.