Institute of Transport and Logistics Studies

Optimal public transport fares for Sydney

Mike Smart, Sapere Research Group

16th Sep 2014  - Lecture Theatre 2 (Room 112), Level 1, St James Campus, The University of Sydney, 173-175 Phillip Street, Sydney, NSW 2000


In this presentation, Mike Smart will outline an approach for determining optimal public transport fares. The main insight is that ideal fares diverge from marginal costs because of externalities. In a series of studies for IPART, Mike has quantified the key externalities relating to congestion, pollution and accidents. From these, socially optimal fare levels can be estimated. Public transport subsidies can also be optimised using this approach. This work has influenced recent fare determinations.


Mike Smart is a director of Sapere Research Group and an economist specialising in competition law, competitive strategy in concentrated industries and regulation of networks. He consults widely on third party access to essential facilities across the rail, telecommunications, gas, payment systems and aviation sectors. Mike has given expert evidence in the Federal Court of Australia and the Australian Competition Tribunal. He is a member of the Competition and Consumer Committee of the Law Council of Australia, and the Economic Society of Australia. Since 2008 he has advised IPART on fare reviews for rail, bus and ferry services.