JOURNAL OF ADVANCED TRANSPORTATION

J. Adv. Transp. 2015; 49:48–72

Published online 23 January 2014 in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/atr.1262

Modeling transit technology selection in a linear transportation corridor

Ya-Juan Chen1, Zhi-Chun Li1* and William H. K. Lam2,3

1
School of Management, Huazhong University of Science and Technology, Wuhan 430074, China
2
Department of Civil and Environmental Engineering, The Hong Kong Polytechnic University, Kowloon, Hong Kong, China
3
School of Traffic and Transportation, Beijing Jiaotong University, Beijing 100044, China

SUMMARY
This paper proposes an analytical model for investigating transit technology selection problem from a
perspective of transit authority. Given a transit technology alternative (e.g., metro, light rail transit, or bus rapid
transit), the proposed model aims to maximize the social welfare of the transit system by determining the
optimal combination of transit line length, number of stations, station location (or spacing), headway, and fare.
In the proposed model, the effects of passenger demand elasticity and capacity constraint are explicitly
considered. The properties of the model are examined analytically, and a heuristic solution procedure for
determining the model solution is presented. By comparing the optimized social welfare for different transit
technology alternatives, the optimal transit technology solution can be obtained together with critical
population density. On the basis of a simple population growth rate formula, optimal investment timing of
a new transit technology can be estimated. The proposed methodology is illustrated in several Chinese cities.
Insightful findings are reported on the interrelation among transit technology selection, population density,
transit investment cost, and transit line parameter design as well as the comparison between social welfare
maximization and profit maximization regimes. Copyright © 2014 John Wiley & Sons, Ltd.

KEY WORDS: transit technology selection problem; linear transportation corridor; social welfare; population
density

1. INTRODUCTION

1.1. Background and motivation

With the rapid growth of economy in some of the developing countries in Asia, traffic congestion has
become an increasing serious problem in large Asian cities due to the shortage of road capacity to
accommodate the growing traffic demand. For instance, in Beijing China, the current annual growth
rate of newly registered cars exceeds 12%, contributing to the total number of motor vehicles over
5.0 million at the end of 2010 (this number was 1.8 million in 2002). However, the annual growth rate
of total road kilometers is about 7%. Such an imbalance of supply and demand would become further
worse due to continuing growth in the traffic volume. Consequently, traffic conditions, particularly in
peak periods, are deteriorating in the urban areas.
To address the imbalance problem of supply and demand and to meet the growing travel demand,
advanced transit technologies, such as metro, light rail transit (LRT), and bus rapid transit (BRT), have
been applied to the urban transportation systems. Many metro, LRT, and BRT projects have been
recently put into service or launched in some large Chinese cities. The report by the Urban Rail Transit
Research Group of China [1] showed that by the end of 2009, 34 metro lines with a total length of over
1000 km have been constructed in 10 cities (e.g., Beijing, Shanghai, Wuhan, and Shenzhen) in
mainland China. Until now, seven cities (e.g., Changchun, Chongqing, and Dalian) in mainland China
have constructed the LRT systems with a total length of over 300 km. The database in ChinaBRT [2]

*Correspondence to: Zhi-Chun Li, School of Management, Huazhong University of Science and Technology, Wuhan
430074, China. E-mail: smzcli@hust.edu.cn

Copyright © 2014 John Wiley & Sons, Ltd.

 MODELING TRANSIT TECHNOLOGY SELECTION 49

also showed that up to now, 13 cities (e.g., Guangzhou and Xiamen) in mainland China have
introduced the BRT systems with a total length of about 400 km. It is anticipated that this number will
reach 1000 km by 2015.
Apparently, each type of transit technologies (e.g., metro, LRT, and BRT) has its own advantages
and disadvantages. The metro transit, as a mass transit mode, can accommodate a large number of
passengers, but requires huge capital and operating costs. It is reported that up to now, the average
capital cost of all metro lines in mainland China is about 0.5 billion RMB (Chinese currency, US$1
approximates RMB$6.23 on January 1, 2013) per kilometer. The BRT system, which is regarded as
a high-quality cost-effective bus-based transit system, uses buses to provide faster and more efficient
services than an ordinary bus line. As such, the BRT system combines the speed, reliability, and
amenities of rail transit systems with the flexibility of buses. In contrast to metro mode, the investment
cost of BRT mode is much lower. For instance, the capital costs of the Guangzhou’s and Xiamen’s
BRT lines are about 32 and 45 million RMB per kilometer, respectively [3]. However, the capacity
of the BRT bus is small, making it difficult to satisfy a high level of passenger demand, particularly
in densely populated urban areas. The capacity of a LRT is generally lower than that of a metro but
higher than that of a BRT, and its capital cost is between the metro’s and the BRT’s capital costs.
For instance, the capital cost of the Changchun’s LRT Line 4 is about 120 million RMB per kilometer.
Such a tradeoff between vehicle capacity and capital cost poses some intriguing and important issues.
For example, which transit technology should be introduced for the authority? When to introduce?
What are the effects of urban population density on the transit technology selection decision?
In addition, the difficulty of construction of a metro project is subject to the urban environment and
site condition in terms of hydro-geological characteristics. Its capital cost is thus more sensitive and
varied considerably as compared with those of the BRT and LRT technologies. For example, the
capital cost of Wuhan Metro Line 2 (which crosses the Yangtze River through a tunnel) is about
0.56 billion RMB per kilometer and that of Tianjin Metro Line 1 is about 0.263 billion RMB per
kilometer. The capital cost of the former is more than twice that of the latter. Therefore, it is
meaningful to ascertain the effects of various metro investment costs on the timing of its
investment. This paper addresses all these interesting problems as stated earlier. It is expected
that the proposed methodology in this paper can provide some new insights for decision makers
for strategic planning purposes.

1.2. Literature review

Over the past decades, significant research efforts have been made towards the design and optimization
of transit lines (e.g., [4–24]). The focuses of these previous studies were mainly on how to design the
parameters of transit lines effectively in the transit system, in terms of transit line length, number and
spacing of stations, headway, or fare. They usually assumed that the transit technologies concerned (e.
g., metro, LRT or BRT) were exogenously pre-specified, and thus, the transit technology selection
problem was not addressed.
In the literature, studies related to the transit technology selection problem mainly focused on the
comparison of costs or operating efficiencies of different transit modes, such as bus, BRT, LRT, or
metro (e.g., [25–29]). Little attention has been paid to exploring the transit technology selection prob-
lem with optimized parameters of transit lines. Some exceptions are Parajuli and Wirasinghe [30],
Daganzo [31], and Tirachini et al. [32,33]. Parajuli and Wirasinghe [30] developed a multi-attribute
decision model to simultaneously incorporate the requirements of transit passengers, transit operators,
and community in the transit technology selection. They adopted the empirical statistical approach,
which requires extensive field survey and data processing, and thus a substantial amount of manpower
and financial expenditure. Daganzo [31] proposed an innovative transit network design framework that
determines the proper structure of the network as well as the optimal station spacing and headway for a
range of transit alternatives (Bus, BRT, and metro). Tirachini et al. [32] developed an analytical model
to compare the operator and user costs of the BRT and rail transit with taking into account the optimi-
zation of transit service frequency and number of transit lines. Tirachini et al. [33] further presented so-
cial welfare and private profit maximization models to compare bus, BRT, LRT, and metro on a corridor,
with transit service frequency and fare as decision variables.

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
50 Y.-J. CHEN ET AL.

However, these previous related studies were usually concerned with the optimization of only
partial parameters of transit lines, such as headway, fare, and/or station spacing. Other important
parameters, such as transit line length and number of stations, were not optimized. As a result, significant
bias may exist in the comparison of the performance of different transit technologies. Moreover, the pre-
vious studies also often assumed a uniform population distribution. To model the reality better, this paper
relaxes this assumption to a case of any population distribution. In addition, the existing relevant studies
did not address the transit technology timing problem (i.e., the optimal timing for introducing a new transit
technology), which is an especially important and timely issue for the developing countries in Asia where
the funds for transit development projects are inadequate.

1.3. Problem statement and contributions

In view of the aforementioned, this paper proposes an analytical model for investigating the transit
technology selection problem (metro, LRT, or BRT). The objective of the proposed model is to
maximize the total social welfare of the transit system. This is an urgent and timely issue for many
Chinese cities, in which the local governments are dramatically increasing the investments in the
metro, LRT, and BRT development projects. To do so, we first present a general model for optimiza-
tion of the transit line parameters for any alternative transit technology. These parameters include the
transit line length, number of stations, station location (or spacing), headway, and fare. We then
compare the resultant transit system performance (i.e., social welfare or benefit) with the optimized
parameters for different transit technologies. Subsequently, the option with the highest social benefit
can be considered as the best selection.
This paper makes four major contributions to the related literature. First, a social welfare maximiza-
tion model is proposed to optimize the parameters of the transit lines, which is a combination of transit
line length, number of stations, station location (or spacing), headway, and fare. In the proposed
model, the effects of passenger demand elasticity and capacity constraint are explicitly considered.
Second, an approach for determining the optimal transit technology solution is presented. Given other
model parameters, the critical population density between different transit technology alternatives is
also identified in terms of the social welfare of the transit system. Third, on the basis of a simple
population growth rate model, the investment (or introduction) timing of a new transit technology
for a city is estimated. The effects of the metro investment cost on its investment timing are also
explored. Fourth, the proposed model and solution procedure are illustrated in some Chinese cities,
and the optimal solution for the social welfare maximization model is compared with that for the profit
maximization model.
The remainder of this paper is organized as follows. In the next section, some basic components of the
proposed model are described, including the model assumptions, passenger demand for each transit sta-
tion, and the social welfare of the transit system. Section 3 presents the social welfare maximization model
and the solution properties of the model. In Section 4, a heuristic solution algorithm is developed to solve
the proposed model. In Section 5, the transit technology selection and timing problems are formulated.
Section 6 applies the proposed model and solution procedure to several real-world Chinese cities. Finally,
conclusions are given in Section 7 together with recommendations for further studies.

2. BASIC COMPONENTS OF THE MODEL

2.1. Assumptions
To facilitate the presentation of the essential ideas without loss of generality, the following basic as-
sumptions are made in this paper.
A1 A linear urban transportation corridor that connects the city’s central business district (CBD) and
suburb is considered. This assumption has also been adopted in some previous related studies,
such as Wirasinghe and Seneviratne [9], Jehiel [34], Liu et al. [35], and Li et al. [20,36].
A2 There are two types of agents in the corridor system: transit authority and passengers. The
transit authority aims to optimize simultaneously the transit line length, number of stations,
station location (or spacing), headway, and fare (e.g., [37,12,13,20]) to maximize the social

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 51

welfare of the transit system. When there are multiple transit technology alternatives (e.g.,
metro, LRT, and BRT), the authority would choose to introduce that one with the highest so-
cial welfare.
A3 A flat fare structure is applied to the transit system, implying that all passengers in the transit
system are charged the same fare regardless of the length of their trips. This is the case in some
cities of China. For example, in Beijing, the metro system currently adopts a flat fare regime.
Passengers need only to pay RMB$2 regardless of their origins and destinations as long as they
do not leave the metro system. The assumption can be easily relaxed to consider other fare
structures, such as a distance-based one [20].
A4 A linear elastic demand density function is used to represent the responses of passengers to the
quality of the transit line service [8,10,38]. Such responses include the decision to switch to an
alternative mode (e.g., auto or walk) and the decision not to make the journey at all.
A5 Following the previous related studies, such as Wirasinghe and Ghoneim [7], Chien and Schonfeld
[14,15], and Chien and Qin [39], it is assumed that passengers choose to use the nearest transit
station. The access time can thus be estimated by the access distance divided by the average access
speed. Transit vehicles running along the transit line stop at each station and the average dwell
time at each stop is a constant.

2.2. Passenger demand for each transit station

Consider a linear transportation corridor of length B, as shown in Figure 1. In this figure, the transit line
extends from the CBD of the city outward. N + 1 denotes the total number of stations on the line. Ds de-
notes the distance of station s from the CBD, and D1 denotes the length of the transit line. Let g(x) be the
population density (i.e., number of residents per unit of distance) at distance x from the CBD, P(x) be the
potential passenger demand density (i.e., number of potential passengers per unit of distance) at location
x, and q(x,s) be the actual density of passenger demand (i.e., number of passengers per unit of distance) for
station s at location x. Denote τ as the average number of trips to the CBD per person per day within the
study area. τg(x) is then the potential passenger demand density at location x per day. Let ϕ be the peak-
hour factor, that is, the ratio of peak-hour flow to the daily average flow. P(x) can then be given by

PðxÞ ¼ ϕτgðxÞ; ∀x ∈ ½0; B (1)

where the parameter ϕ is used to convert the traffic volume from a daily basis to an hourly basis. When the
population density follows a uniform distribution (i.e., g(x) = g0), the potential passenger demand density
is also uniformly distributed (i.e., P(x) = P0 = ϕτg0).
Passenger demand for transit service is usually sensitive to level of transit service and fares, and thus
is elastic. To model the effects of passenger demand elasticity, we define a linear elastic demand
density function according to A4 as follows.


qðx; sÞ ¼ PðxÞ 1  ea us ðxÞ  ew ws  et t s  ef f ; ∀x ∈ ½0; B; s ¼ 1; 2; …; N (2)

Figure 1. The transit line configuration along a linear transportation corridor.

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
52 Y.-J. CHEN ET AL.

where us(x) is the passenger access time to station s from location x, ws is the average passenger wait
time at station s, ts is the passenger in-vehicle time from station s to the CBD, and f is the (flat) fare to
the CBD in terms of A3. ea, ew, et, and ef are the sensitivity parameters for the access time, wait time,
in-vehicle time, and fare, respectively. It should be pointed out that they are not the actual measures of
demand elasticities. The ratios ea/ef, ew/ef, and et/ef define the values of access time, wait time, and
in-vehicle time, respectively (e.g., [10,40,20]). It is assumed in this paper that all passengers are
homogenous in terms of their values of access time, wait time, and in-vehicle time, and these values
of time do not change with the change of transit technology.
It should be pointed out that the linear demand function, as adopted in this paper, has been
extensively used in transport demand models as a result of its convenience for analytical tracta-
bility. Other alternative demand functions, such as exponential demand function, can also be
adopted. However, it is usually difficult, if not impossible, to derive a closed-form solution. As
such, a non-linear demand function can be approximated as a linear demand function by using
the first-order Taylor series expansion.
According to A5, the passenger access time us(x) in Equation (2) can be calculated by the distance
between location x and station s divided by the average access speed of passengers, that is,

ðDs  xÞ=V a ; ∀ls ≤ x ≤ Ds
us ðxÞ ¼ ; ∀s ¼ 1; 2; …; N (3)
ðx  Ds Þ=V a ; ∀Ds < x ≤ ls1

where Va is the average access speed of passengers.

The passenger wait time at station s, ws, can be estimated by

ws ¼ αH; ∀s ¼ 1; 2; …; N (4)

where H is the headway of the transit service, and α is a calibration parameter that depends on the
distributions of transit headway and passenger arrival. The value α = 0.5 is commonly used to suggest
a constant headway and a uniform passenger arrival distribution.
The passenger in-vehicle time from station s to the CBD, ts, comprises the non-stop line-haul travel
time, Ts1, and vehicle dwell time, Ts2, at the transit stations, that is,

t s ¼ T s1 þ T s2 ; ∀s ¼ 1; 2; …; N (5)

where Ts1 can be calculated by the length of the trip being made by the passengers divided by the
average transit vehicle operating speed, Vt, that is,

Ds
T s1 ¼ ; ∀s ¼ 1; 2; …; N (6)
Vt

For simplicity, the vehicle dwell time at a transit station is assumed to be a constant, following
Wirasinghe and Ghoneim [7], Chien and Schonfeld [14,15], and Li et al. [20]. Consequently, the total
transit vehicle dwell time from station s to the CBD, Ts2, can be calculated by

T s2 ¼ β0 ðN þ 1  sÞ; ∀s ¼ 1; 2; …; N (7)

where β0 is the average vehicle dwell time at a station, which can be calibrated with observed data [41].
In the following, we define the number of passengers boarding at each station of the transit
line. Note that two stations on any segment of the transit line are competing for passengers
between the stations. Consequently, there exists a passenger watershed line that divides the line
segment between two adjacent stations into two sub-segments, as shown in Figure 1. The passen-
gers in the two sub-segments respectively use the upstream and downstream stations of the line
segment. Let ls be the passenger watershed line between stations s and s + 1, and Ls be the
distance of the passenger watershed line ls from the CBD. From A5, the passengers board transit

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 53

vehicles at the nearest transit station, implying that the watershed line ls is located at the middle
point of the line segment (s, s + 1), that is,

1
Ls ¼ ðDs þ Dsþ1 Þ; ∀s ¼ 1; 2; …; N (8)
2

where DN + 1 = 0 and LN ¼ 12 DN , where LN defines the minimum service coverage of the transit line.
Consequently, the total passenger demand for station s, Qs, can be given by

Ls1
Qs ¼ ∫ Ls qðx; sÞdx; ∀s ¼ 1; 2; …; N (9)

where Ls (s = 1, 2, …, N) can be given by Equation (8). L0 represents the maximum service coverage of
the transit line, as shown in Figure 1. Beyond location L0, no one will patronize the transit system,
meaning that q(L0,1) = 0 (L0 ∈ [D1,B]) holds, where q(L0,1) is the density of passenger demand for
station 1 at location L0. Combining q(L0,1) = 0 and Equation (2) then yields

Va

L0 ¼ D1 þ 1  ew w1  et t 1  ef f (10)
ea

In light of the aforementioned, the service coverage of the transit line is [LN,L0].
Substituting Equations (1)–(8) into Equation (9), one obtains

Ls1 Ds Ls1
!
Qs ¼ λ s ∫ Ls PðxÞdx 
ea
Va
∫ Ls PðxÞðDs  xÞdx þ ∫ Ds PðxÞðx  Ds Þdx ; ∀s ¼ 1; 2; …; N (11)

where
 
Ds
λs ¼ 1  ew ws  et t s  ef f ¼ 1  ew αH  et þ β0 ðN þ 1  sÞ  ef f ; ∀s ¼ 1; 2; …; N (12)
Vt

According to Equation (12), Equation (10) can be rewritten as

Va
L 0 ¼ D1 þ λ1 (13)
ea

where λ1 = 1  eww1  ett1  eff.

2.3. Social welfare

According to A2, the objective of the authority is to maximize the social welfare of the transit system,
represented by W. It is defined as the sum of the consumer surplus (represented by G) and the net profit
of the transit operator (represented by π), that is,

W ¼Gþπ (14)

In the following, we define the consumer surplus G and the operator’s net profit π, respectively.

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
54 Y.-J. CHEN ET AL.

2.3.1. Consumer surplus

To determine the consumer surplus G, we first define the surplus of the consumers (or passengers)
boarding at station s, represented as Gs. To do so, we convert the linear demand density function
shown in Equation (2) to find fare as a function of demand density (e.g., [8,10,38]). The total social
benefit (i.e., the users’ willingness to pay) can then be obtained by integrating the inverted function
over the demand. The consumer surplus can thus be derived as the price that the users are willing to
pay minus the price that the users actually pay. Along this vein, the inverse of the demand density
function in Equation (2) can be expressed as

1 qðx; sÞ
q1 ðx; sÞ ¼ ð1  ea us ðxÞ  ew ws  et t s Þ  ; ∀x ∈ ½0; B; s ¼ 1; 2; …; N (15)
ef ef PðxÞ

The surplus of consumers (or passengers) originating at location x and boarding at station s, which is
represented by G(x,s), can thus be expressed as

qðx;sÞ  
Gðx; sÞ ¼ 0∫ 1
ef
ð1  ea us ðxÞ  ew ws  et t s Þ 
z
ef PðxÞ
dz  qðx; sÞf
(16)
PðxÞ
2
¼ 1  ea us ðxÞ  ew ws  et t s  ef f ; ∀x ∈ ½0; B; s ¼ 1; 2; …; N
2ef

According to Equations (16) and (12), the consumer surplus Gs for station s can be given by

Ls1 Ls1
PðxÞ
2
Gs ¼ ∫ Ls Gðx; sÞdx ¼
2ef
∫
1  ea us ðxÞ  ew ws  et t s  ef f dx
Ls

Ds  2 Ls1  2 (17)
¼ Ls ∫
PðxÞ
2ef
ea
λs  ðDs  xÞ dx þ Ds
Va
PðxÞ
2ef
∫ ea
λs  ðx  Ds Þ dx; ∀s ¼ 1; 2; …; N
Va

The total consumer surplus of the transit system can thus be calculated by

X
N
G¼ Gs (18)
s¼1

where N is the number of stations to be determined.

2.3.2. Net profit of the operator

We now define the operator’s net profit π. It equals the total operating revenue, R, which is generated
from the passenger fares, minus the total cost, C, that is,

π ¼RC (19)

The total operating revenue R is the sum of the number of passengers boarding at each station mul-
tiplied by the corresponding fare, that is,

X
N
R¼ f Qs (20)
s¼1

where the passenger demand for station s, Qs, is given by Equation (11).

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 55

The total cost C is incurred by transit vehicle operations, transit line, and transit stations [14,15,20],
and thus consists of the following three cost components: transit vehicle operating cost CO, transit line
cost CL, and transit station cost CS, that is,

C ¼ CO þ CL þ CS (21)

The transit vehicle operating cost CO comprises the fixed operating cost and variable operating cost,
and is represented as

Θ
C O ¼ μ0 þ μ1 (22)
H

where μ0 is the fixed operating cost and μ1 is the hourly operating cost per vehicle. Θ is the vehicle
round journey time, and HΘ is the fleet size or the number of vehicles on the line. The round journey
time Θ comprises the terminal time, line-haul travel time, and vehicle dwell time at stations, which
is expressed as
Θ ¼ ζ T 0 þ 2ðT 11 þ T 12 Þ (23)

where T0 is the constant terminal time on the line and ζ is the number of terminal times on the line. T11
and T12 are, respectively, the total line-haul travel time and total dwell time for transit operations from
station 1 to the CBD. The number “2” denotes a round-trip journey. From Equations (6) and (7), we
have T11 = D1/Vt and T12 = β0N.
The transit line cost CL is the sum of the fixed costs γ0 (e.g., line overhead cost) and variable costs
γ1D1 (e.g., land acquisition, line construction, maintenance, and labor costs), proportional to the transit
line length D1, that is,

C L ¼ γ0 þ γ 1 D 1 (24)

where γ1 is the hourly transit line operating cost per kilometer.

The transit station cost CS includes fixed costs (e.g., station overhead cost) and variable costs
(e.g., station land acquisition, design and construction, operating, and maintenance costs). The
total variable cost is determined by the number of stations multiplied by the average unit station
cost. CS can thus be expressed as

C S ¼ Λ0 þ Λ1 ðN þ 1Þ (25)

where Λ0 is the fixed cost for station management, which is measured in $/hour, and Λ1 is the
variable cost, which is measured in $/station-hour.
On the basis of Equations (21–25), the total cost C can be represented as
  
μ1 2D1
C ¼ μ0 þ ζ T0 þ þ 2β0 N þ ðγ0 þ γ1 D1 Þ þ ½Λ0 þ Λ1 ðN þ 1Þ: (26)
H Vt

Substituting Equations (18), (19), (20), and (26) into Equation (14), one obtains the social welfare of
the transit system as follows:

X X   
N N
μ 2D1
W¼ Gs þ f Q s  μ0 þ 1 ζ T 0 þ þ 2β0 N  ðγ0 þ γ1 D 1 Þ  ½ Λ 0 þ Λ 1 ðN þ 1 Þ
s¼1 s¼1
H Vt
(27)

where Gs and Qs are given by Equations (17) and (11), respectively.

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
56 Y.-J. CHEN ET AL.

3. MODEL FORMULATION

3.1. Social welfare maximization model

In view of the aforementioned, the social welfare maximization model of the transit authority can be
formulated as

X X   
N N
μ1 2D1
max W ðD; H; f Þ ¼ Gs þ f Q s  μ0 þ ζ T0 þ þ 2β0 N
s¼1 s¼1
H Vt (28)
ðγ0 þ γ1 D1 Þ  ½Λ0 þ Λ1 ðN þ 1Þ

XN
s:t: H ≤ K= s¼1 Qs (29)

D1 ≤ B (30)

where “D” is the vector of station locations. The decision variables include the transit line length D1,
station locations D2, …, DN, headway H, and fare f. K is the vehicle capacity. Equation (29) is the
capacity constraint, which guarantees that the transit service supply satisfies the associated passenger
demand. Equation (30) is the transit line length constraint, which requires that the transit line length
does not exceed the corridor length.

3.2. Properties of model solutions

The optimal solutions for the transit line length, station location (or spacing), headway, and
fare can be obtained by setting the partial derivatives of objective function (28) with respect
to its decision variables equal to zero and solving them simultaneously. We then have the
following proposition.

Proposition 1. The optimal transit line length, station location, headway, and fare solutions
for social welfare maximization models (28)–(30) satisfy the following system of equations:

8  
>
> X
sþ1
∂Gi 2μ1
>
>  Δs þ γ1 þ ψ ¼ 0; ∀s ¼ 1; 2; …; N;
>
> ∂Ds HV t
>
> i¼s1 vffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
>
>   ffi
>
> u
>
> u 2D1
>
> u μ1 e f ζ T 0 þ þ 2β0 N  ηKef
>
> u Vt
>
> H ¼ t XN ;
>
< αew s¼1 s Q
(31)
>
> f ¼ η;
>
>
>
> !
>
> XN
>
> K
>η
>  Q ¼ 0;
>
> H s¼1 s
>
>
>
>
>
> ψðB  D1 Þ ¼ 0;
>
:
η ≥ 0; ψ ≥ 0

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 57

where Δs = 1 if s = 1, and 0 otherwise. η and ψ are the Lagrange multipliers (or shadow prices)
of constraints (29) and (30), respectively. ∂Gi/∂Ds can be given by

8
> ∂G0 ∂GNþ1
>
> ¼ ¼0
>
> ∂D1 ∂DN
>
> " D1
>
>   L0   #
>
>
>
>
>
>
∂G 1
¼
1 ∂λ 1
Q 
∂D1 ef ∂D1 1 ef V a L1
1 e a
∫ ea
PðxÞ λ1  ðD1  xÞ dx  ∫ D1 PðxÞ λ1 
ea
ðx  D1 Þ dx
>
>
Va Va
>
>  2
>
>
>
> 1 ea
>
>  Pð L Þ λ  ð D  L Þ ;
>
> 4ef
1 1
Va
1 1
>
>
>
< ∂G  2  2
s1 1 e a 1 ea
¼ PðLs1 Þ λs1  ðDs1  Ls1 Þ þ PðLs Þ λs1  ðLs  Ds1 Þ ; ∀s ¼ 2; …; N;
>
> ∂Ds 4ef Va 4ef Va
>
> " Ds     #
>
> Ls1
>
>
>
>
>
>
∂Gs
¼
1 ∂λs
Q 
1 ea
∂Ds ef ∂Ds s ef V a Ls
∫ ea
∫ ea
PðxÞ λs  ðDs  xÞ dx  Ds PðxÞ λs  ðx  Ds Þ dx
Va Va
>
>
>
>    2
>
> 2
>
> 
1 ea
PðLs Þ λs  ðDs  Ls Þ þ
1 ea
PðLs1 Þ λs  ðLs1  Ds Þ ; ∀s ¼ 2; …; N;
>
>
>
> 4ef Va 4ef Va
>
>  2
>
>
>
>∂G 1 ea
: sþ1 ¼ PðLs Þ λsþ1  ðLs  Dsþ1 Þ ; ∀s ¼ 1; 2; …; N  1
∂Ds 4ef Va
(32)

∂λs
where ∂Ds ¼  Vett .

Remark 1. Its proof is given in APPENDIX A. Equation (31) shows that the optimal transit
fare under the social welfare maximization equals the Lagrange multiplier of capacity con-
straint (29). When capacity constraint (29) is inactive or unbinding, the optimal transit fare is
zero. The result is not surprising because the marginal operator’s cost is zero because of the
assumption of a constant vehicle dwell time at transit stations. However, the marginal cost
and thus the fare becomes positive if capacity constraint (29) becomes active or binding. This
result is consistent with that in some previous related studies, such as Kocur and Hendrickson
[8], Chang and Schonfeld [10], Spasovic et al. [13], and Li et al. [19]. The zero fare result im-
plies zero revenue and thus negative net profit. Therefore, a form of subsidy is required to
compensate the deficit of the transit operations under the social welfare maximization. It should
be pointed out that by October 2012, there are 44 free-of-charge public transit lines in
Chengdu, China.
The optimality conditions of the model solution described in Proposition 1 are applicable to
any station distribution (even or uneven) and any population density function. In the following,
we look at a special case with an even station spacing (i.e., average station spacing) and a
uniform population distribution (i.e., g(x) = g0 or P(x) = P0; Equation (1)). This can provide useful
information to the transit operator for the planning and design of transit line, particularly at the
early stages of transit development projects. Let δ represent the average or even station spacing.
One then obtains Ds = (N + 1  s)δ and Ls = (N  s + 0.5)δ in terms of Equation (8). Substituting
them into models (28–30), we can then derive the first-order optimality conditions of models
(28–30) as follows (this proof is given in APPENDIX B).

Proposition 2. When the population density along the linear urban corridor is uniformly distributed, the
optimal average station spacing, headway, and fare solutions for social welfare maximization models
(28)–(30) satisfy the following system of equations:

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
58 Y.-J. CHEN ET AL.

8  
>
> XN
∂Gs 2μ1
>
>  þ γ þ ψ N ¼ 0;
>
> ∂δ HV t 1
>
> s¼1
>
> vffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
  ffi
>
> u
>
> u 2Nδ
>
> uμ1 ef ζ T 0 þ þ 2β0 N  ηKef
>
> u Vt
>
> H ¼ t X ;
>
< N
αe w Q
s¼1 s
(33)
>
> f ¼ η;
>
>
>
> !
>
> X
N
>
> K
>η
>  Q ¼ 0;
>
> H s¼1 s
>
>
>
>
>
> ψðB  D1 Þ ¼ 0;
>
:
η ≥ 0; ψ ≥0

where ∂Gs /∂δ can be given by

8   2
>
> ∂G1 1 1 et V a ea N et V a 2
>
< ¼ þN λ1  δ P0  λ P0 ;
∂δ 2ef 2 ea V t 2V a ef ea V t 1
>     (34)
> ∂Gs
> N þ 1  s et ea δ2 1 ea δ 2
: ¼ 2λs δ  P0 þ λs  P0 ; ∀s ¼ 2; …; N
∂δ 2ef Vt Va 2 2ef Va 2

Thus far, we have formulated the model for the design of the transit line parameters (i.e., transit
line length, number of stations, station location/spacing, headway, and fare) under the social
welfare maximization regime. In the next section, we develop a solution algorithm to solve the
proposed model.

4. SOLUTION ALGORITHM

In this section, a heuristic solution algorithm is presented to solve the proposed models (28–30). It is
directly based on the first-order optimality conditions of the model, as shown in Proposition 1 or 2. The
step-by-step procedure is as follows.
Step 1. Initialization. Set initial Lagrange multipliers η(0) and ψ (0) as zero and choose an initial value
ð 0Þ
for each design variable of the transit line, including transit line length D1 , station locations
ð0Þ
Ds (s = 2, …, N), headway H , and fare f . Set iteration counter j = 1.
(0) (0)

Step 2. Determination of passenger demand. Calculate the corresponding passenger demand for
each station on the transit line, Qs (s = 1, 2, …, N) by Equation (11).
Step 3. Updating of design variables and Lagrange multipliers. Check capacity constraint (29) and
transit line length constraint (30) and update the values of the headway, fare, transit line
length, station locations (or spacing), and Lagrange multipliers accordingly.
Step 3.1. Updating headway H( j) and corresponding Lagrange multiplier η( j). Update the value of
headway H( j) with fixed Dðs j1Þ , f ( j  1) and ψ ( j  1) by Equation (31) or (33). Then, check
capacity constraint (29). If the resultant headway exceeds the capacity constraint bound,
then it is set as the boundary value, and update the value of Lagrange multiplier η( j) by
Equation (31) or (33). Otherwise, set the value of Lagrange multiplier η( j) as zero.
Step 3.2. Updating fare f ( j ). Calculate the value of f ( j) by Equation (31) or (33) with fixed Dðs j1Þ ,
H ( j), η( j), and ψ ( j  1).
Step 3.3. Updating station locations Dðs jÞ (s = 1, 2, …, N) and corresponding Lagrange multiplier ψ ( j).
Determine the values of Dðs jÞ (s = 1, 2, …, N) by Equation (31) or (33) with fixed f ( j), H( j),
and η( j). Check whether transit line length constraint (30) is satisfied. If it is satisfied, set the
corresponding Lagrange multiplier ψ( j) as zero. Otherwise, let the transit line length equal
the corridor length (i.e., D1 = B) and update the value of ψ( j) according to Equation (31) or (33).

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 59

Step 4. Convergence check. If the resultant design variables for successive iterations are sufficiently
close, then stop. Otherwise, set j = j + 1 and go to Step 2.

Remark 2. In Step 3, the values of the design variables, namely the transit headway, fare, and station
location/spacing, together with the values of the Lagrange multipliers, are sequentially updated one at a
time while holding the values of other variables fixed. The associated constraints are immediately
checked after the updating of each decision variable such that the resultant solutions at each iteration
of the solution process always satisfy all the constraints.

Remark 3. The aforementioned solution procedure is based on a fixed number of stations. The number
of stations is an integer variable, which makes it difficult to solve the resultant mixed integer program-
ming problem. Fortunately, the number of stations on a transit line is a finite number. Thus, one can
find the optimal number of stations by comparing the resultant objective function values with different
numbers of stations (i.e., using the method of exhaustion).

5. TRANSIT TECHNOLOGY SELECTION AND TIMING PROBLEMS

Using the solution procedure developed earlier, one can immediately obtain the optimal solutions of the
transit design variables: the transit line length, number of stations, station location/spacing, headway, and
fare, denoted as {N*, D*, H*, f*}. In this section, we address the transit technology selection problem.
Let us consider multiple alternative transit technologies, such as metro, LRT, or BRT, which are getting
rapid developments and applications in some large cities of China. Following A2, the authority would
choose to introduce the transit technology that yieldsna higher social welfare. o Letnm1 and m2 represent o
two different transit technologies, respectively. Let N m1 ; Dm1 ; H m1 ; f m1 and N m2 ; Dm2 ; H m2 ; f m2
be the optimal solutions for the design variables of transit technologies m1 and m2, respectively. They
can
be obtained by using  the model

and solution procedure  proposed in the previous sections. Let
       
W m1 N m1 ; Dm1 ; H m1 ; f m1 and W m2 N m2 ; Dm2 ; H m2 ; f m2 be the social welfare levels associated with
the transit technologies m1 and m2, respectively. We can then define the transit technology selection
problem as follows:

Definition 1. (Transit technology selection problem)

Given the transit technology alternatives m1 and m2 and their associated parameters, the transit technol-
ogy m1 is selected if and only if the following condition holds:



W m1 N m1 ; Dm1 ; H m1 ; f m1 ≥ W m2 N m2 ; Dm2 ; H m2 ; f m2 (35)

Otherwise, the transit technology m2 is selected.

Note that all of the transit line design parameters are a function of the population density. This
means that different population densities are associated with different optimal solutions of the transit
line design variables, which lead to different levels of the social welfare. Naturally, this leads us to
ask the question of whether there is a population density that induces an equal level of the social
welfare for different transit technologies. To answer the intriguing question, we consider the case of
a uniform population density, that is, g(x) = g0 (Equation (1)), and introduce the following definition.

Definition 2. (Critical population density)

Given the transit technology alternatives m1 and m2 and their associated parameters, population density
g0 is referred to as a critical population density of the two technologies if and only if it satisfies



 





W m1 N m1 g0 ; Dm1 g0 ; H m1 g0 ; f m1 ðg0 Þ ¼ W m2 N m2 g0 ; Dm2 g0 ; H m2 g0 ; f m2 g0 (36)

We now present a method to determine the critical (or indifference) population density for the transit
technology options in terms of Equation (36).

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
60 Y.-J. CHEN ET AL.

Step 1. Choose an initial value of the population density.

Step 2. For each of the transit technology options, solve the social welfare maximization models (28–30)
to obtain the optimal design variable solutions {N*, D*, H*, f*}.
Step 3. Calculate the social welfare with the optimized design variables for each transit technology.
Step 4. Compare the resultant levels of the social welfare for the transit technology alternatives and
determine the optimal transit technology solution in terms of Equation (35).
Step 5. Repeat Steps 2–4 for other values of the population density until Equation (36) is satisfied.
Assuming that other conditions (e.g., the socio-economics characteristics of community) remain
unchanged, according to Definition 2, a transit technology (e.g., metro, LRT, or BRT) can be
introduced into a city as long as the level of the population density of the city reaches the level of
the critical density. To estimate the timing for introducing a new transit technology into a city, a simple
population growth rate model is used and specified as follows:

gðt Þ ¼ gð0Þð1 þ yÞt (37)

where g(0) and g(t) are the average population densities of the urban corridor in the base year and year t,
respectively. y is the average yearly growth rate of the population in the study area.
In view of the aforementioned, once the population density of a city in a future year reaches the
critical population density, the new transit technology can then be launched. Thus, we can define
the transit technology introduction or investment timing as follows.

Definition 3. (Transit technology investment timing)

An appropriate time for introducing a new transit technology is defined as the minimum time that leads
the level of average population density of a city to reach the level of the critical population density
 
t  ¼ min t gðt Þ ≥ g0 (38)

where g0 and g(t) are determined by Equations (36) and (37), respectively.

6. MODEL APPLICATIONS

To facilitate the presentation of the essential ideas and contributions of this paper, we use five Chinese
cities to illustrate the applications of the proposed model and solution method, as shown in Figure 2.
Of these cities, the population densities of Beijing, Shenzhen, and Wuhan (the capital of Hubei
province) are high, whereas those of Changchun (the capital of Jilin province) and Hefei (the capital
of Anhui province) are medium. In the following, we explore the effects of the transit technology
selection and population density on the transit line design, and determine the critical population density

Figure 2. Geographic locations and average population densities of sample cities.

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 61

for introduction of a new transit technology. We also estimate the timings for introducing the metro or
LRT into the medium-scale Chinese cities (i.e., Changchun and Hefei). To look at the effects of
different transit operating regimes on the design of the transit line parameters, the optimal solutions
for the social welfare maximization and profit maximization models are compared. In addition, the
effects of the metro investment cost on its investment timing are also examined. The proposed solution
algorithm was coded in programming language C++ and run on a personal computer with an Inter
Pentium 2.2-GHz CPU and 4GB of RAM. In the numerical experiment, the convergence precision
of the solution algorithm is set as 106.
In the numerical illustration, the length of the linear transportation corridor in the cities concerned is
fixed as 30 km, and the average access speed of passenger Va is 4.0 km/hour. The sensitivity
parameters for the access time, wait time, in-vehicle time, and fare are ea = 0.98, ew = 0.98, et = 0.49,
and ef = 0.098, respectively [20]. The peak-hour factor and the average number of trips to the CBD
per person per day are ϕ = 0.1 and τ = 1.0, respectively. The terminal time and the number of terminal
times on the transit line are T0 = 0.04 hour and ζ = 2.0, respectively. The input data for other model
parameters for the alternative transit technologies are shown in Table I. We need to determine the
following transit line parameters: transit line length, average station spacing, headway, and fare.

6.1. Change in social welfare with population density for different transit technologies
Figure 3 shows the change in the optimized social welfare with population density for the metro, LRT,
and BRT technologies. It can be seen that as the population density increases, the social welfares for all
the three technologies increase. However, the increase rate for the metro is quickest, that for the BRT is

Table I. Input parameters for the BRT, LRT, and metro technologies.

Parameter Description BRT LRT Metro

Vt Average transit vehicle operating speed (km/hour) 30 35 40
β0 Average vehicle dwell time at a transit station (seconds) 30 34 36
μ0 Fixed component of transit vehicle operating cost ($/hour) 90 750 1350
μ1 Variable component of transit vehicle operating cost ($/veh-hour) 65 400 540
Λ0 Fixed component of transit station cost ($/hour) 100 700 1250
Λ1 Variable component of transit station cost ($/station-hour) 50 300 500
γ0 Fixed component of transit line cost ($/hour) 120 400 750
γ1 Variable component of transit line cost ($/km-hour) 60 150 300
K Capacity of vehicles (passengers/veh) 80 800 1800
Source: The data for BRT is from CPSITS [3], the data for LRT is from BAOGAO [42], and the data for metro is from Zhang
[43] and Li et al. [20].

120000

BRT
100000 LRT
Metro
80000
Social welfare ($/h)

60000 F (1.44, 53450)

40000
E (1.10, 37759)

20000

Hefei Changchun Wuhan Shenzhen Beijing

0
0.05 0.25 0.45 0.65 0.85 1.05 1.25 1.45 1.65 1.85 2.05 2.25 2.45

-20000 Population density (104 persons/km2)

Figure 3. Change of social welfare with population density for BRT, LRT and metro technologies.

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
62 Y.-J. CHEN ET AL.

slowest, and that for the LRT is in between. As a result, the social welfare curve of the LRT intersects
with those of the BRT and the metro at points E and F, which lead to the critical population density of
11 000 and 14 400 persons per square kilometer in terms of Equation (36), respectively. The social
welfare associated with point E is $37 759 per hour and that associated with point F is $53 450 per
hour. Consequently, when the urban population density is higher than the critical population density
14 400 (or lower than 11 000), the metro (or the BRT) is a preferable selection, whereas the LRT would
be a better selection when the population density is between 11 000 and 14 400 persons per square
kilometer.
Figure 3 also shows the transit technology solutions for five Chinese cities, as shown in Figure 2.
Specifically, Hefei, a relatively low-density city, is more suitable to apply the BRT technology. For
Changchun, a medium-density city, the LRT is a better option. However, the population densities of
Wuhan, Shenzhen, and Beijing exceed the critical density 14 400 persons per square kilometer. There-
fore, the mass metro transit should be introduced into these cities. These results are consistent with the
real cases. In addition, it can also be noted that when the population density is below 500 persons per
square kilometer, the introduction of the BRT mode always induces a negative social welfare. For the
LRT and metro, a negative social welfare occurs at the population densities of 2500 and 4300 persons
per square kilometer, respectively.

6.2. Estimation of LRT and metro investment timings

As shown in Figure 3, until now, the LRT has not been introduced into Hefei city and the metro has not
been introduced into Changchun city because of insufficient population density. We now predict the
time to build the LRT for Hefei and to build the metro for these both cities. Given that the residential
population growth rate (including those who move from the city’s suburb to the urban area) remains at
the average level of 2% (the current real case), one can then plot the residential population density
growth curves by year for the two cities, as shown in Figure 4. It can be seen that between 2017 and
2018, the residential density of Hefei will reach the level of the critical density for introducing the LRT
(i.e., 11 000 persons per square kilometer); thus, the proper time to introduce the LRT for Hefei is
2018. Similarly, the residential densities of Changchun and Hefei will reach the level of the critical density
for building the metro (i.e., 14 400 persons per square kilometer) in 5 and 19 years, respectively. That is,
the metro may be constructed in 2017 for Changchun city and in 2031 for Hefei city.

6.3. Optimal transit line design for different transit technologies

Figure 5 displays the change in the optimized social welfare with number of stations under
different transit technologies for different cities. We take Shenzhen (a high-density city) and Hefei
(a medium-density city) as examples. Their average population densities are 17 150 and 9897 persons
per square kilometer respectively, as shown in Figure 2. It can be noted that for all cases, as the
number of stations increases, the social welfare first increases and then decreases. The optimal
Population density (104 persons/km2)

2.1

1.9 Changchun
Hefei
1.7

1.5 1.44

1.3

1.10
1.1

0.9
2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

Year

Figure 4. Estimation of LRT and metro investment timings for two Chinese cities.

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 63

80000 35000
70000
30000

Social welfare ($/h)

60000

Social welfare ($/h)

25000
50000
BRT 20000 BRT
40000 LRT LRT
Metro 15000 Metro
30000
10000
20000

10000 5000

0 0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31
Number of stations Number of stations
(a) (b)
Figure 5. Change of social welfare with number of stations for BRT, LRT and metro technologies: (a) Shenzhen
case (a high-density city); (b) Hefei case (a medium-density city).

numbers of stations for the BRT, LRT, and metro options are, respectively, 19, 19, and 20 for
Shenzhen city (shown in Figure 5a), and 18, 17, and 17 for Hefei city (shown in Figure 5b). This
means that the higher the urban residential density, the larger the number of stations. In addition,
Figure 5b shows that for a relatively low-density city (e.g., Hefei), the BRT mode would lead to a
higher level of social welfare than either the metro or the LRT regardless of the number of stations.
Table II indicates the effects of the population density on the optimal solutions for the transit line
design with different transit technologies. It can be seen in Table II that for a given transit technology,
a city with higher population density requires a larger number of stations, a longer transit line length, a
shorter station spacing (or a higher station density), a smaller headway, a larger fleet size, and a higher
fare, leading to a higher level of passenger demand and of social welfare, and vice versa. On the other
hand, for a given city, in contrast to the LRT and metro modes, the BRT mode requires the shortest
transit line length, the shortest station spacing, the smallest headway, the highest fare, and the largest
fleet size. These parameter values for the LRT are between those of the BRT and metro. In addition, it
can be noted that the introduction of the metro mode in Shenzhen city can generate a higher social wel-
fare than that of either the LRT or the BRT, which are $69 741, $66 596, and $59 571 per hour, respec-
tively. However, this result is just reverse for Hefei city; that is, the BRT mode is a more suitable
selection for this city compared with the LRT and metro modes.

6.4. Comparison of social welfare maximization and profit maximization solutions

We now look at the effects of different transit operating regimes (i.e., a public and a private regime) on
the design of the transit line parameters. The public regime is associated with the social welfare
maximization model that is proposed in this paper, whereas the private regime is associated with the
profit maximization model that was presented in Li et al. [20]. Under the private regime, the profit-
driven private operator seeks to maximize its own net profit by designing the transit line parameters.

Table II. Optimal solutions for different cities under the BRT, LRT, and metro technologies.

Shenzhen (a high-density city) Hefei (a medium-density city)

Optimal solution BRT LRT Metro BRT LRT Metro
Number of stations 19 19 20 18 17 17
Transit line length (km) 18.43 21.85 26.00 18.18 21.08 23.97
Average station spacing (km) 0.97 1.15 1.30 1.01 1.24 1.41
Fare ($) 0.66 0.69 0.23 0.63 0.51 0.00
Headway (minute) 0.22 1.96 3.65 0.38 3.47 6.26
Fleet size (no. of transit vehicles) 451 53 30 251 28 16
Total passenger demand (pass/hour) 22 081 24 559 29 569 12 592 13 824 16 020
Net profit ($/hour) 17 249 15 127 30 751 10 696 14 401 27 875
Social welfare ($/hour) 59 571 66 596 69 741 33 223 32 081 27 433

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
64 Y.-J. CHEN ET AL.

For completeness, the profit maximization model is provided in APPENDIX C of this paper. Table III
gives the optimal solutions for the transit line design under the two operating regimes. It can be seen
that for a given transit technology (e.g., the metro of Wuhan or the LRT of Changchun), in contrast to
the profit maximization regime, the social welfare maximization regime can lead to a higher level of
the transit service with a longer transit line length, a shorter station spacing, a lower fare, a smaller
headway (or a larger fleet size), a higher passenger demand level, and a higher social welfare level,
but a negative net profit. This means that a form of subsidy is required to compensate the deficit of
the transit operations under the social welfare maximization regime. Conversely, the profit maximiza-
tion regime can achieve a positive net profit but a low level of the social welfare.

6.5. Effects of metro investment cost on the critical population density

As stated in the Introduction section, the investment cost of the metro technology is affected by the
environment and the hydro-geological condition of the site. There is, thus, a need to ascertain the
impacts of the metro investment cost on the critical population density (or investment timing). To do
so, we conduct numerical experiments by scaling the baseline values of the parameters for the metro cap-
ital cost (i.e., μ0, μ1, γ0, γ1, Λ0, and Λ1) by a multiplier of 1.2 (i.e., the scaling factor is 1.2 or sf = 1.2) and a
multiplier of 0.8 (i.e., sf = 0.8). Figure 6 shows the change of the social welfare with the population density
for different metro investment costs. It can be noted that for a given population density, as the metro

Table III. Optimal solutions with different transit operating regimes for different cities.

Metro in Wuhan LRT in Changchun

(a high-density city) (a medium-density city)
Profit Social welfare Profit Social welfare
Optimal solution maximization maximization maximization maximization
Number of stations 13 20 14 18
Transit line length (km) 20.28 26.00 20.44 21.6
Average station spacing (km) 1.56 1.30 1.46 1.20
Fare ($) 3.43 0.18 3.44 0.61
Headway (min) 7.12 4.21 5.24 2.6
Fleet size (no. of transit vehicles) 12 26 18 39
Total passenger demand (pass/hour) 10 409 25 629 9156 18 489
Net profit ($/hour) 13 064 30 671 15 179 14 772
Social welfare ($/hour) 32 898 56 706 32 901 47 035

120000 BRT sf = 0.8

LRT sf = 1.0
sf = 1.2
100000 Metro
(2.24, 91752)
Social welfare ($/h)

80000

60000 (1.44, 53450)

40000 (0.98, 32943)

20000

0
0.65 0.85 1.05 1.25 1.45 1.65 1.85 2.05 2.25 2.45

Population density (104 persons/km2)

Figure 6. Change of social welfare with population density for different metro investment costs.

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 65

Critical population density (104 persons/km2)

2.5
(1.2, 2.24)

2.0

1.5 (1.0, 1.44)

1.0
(0.8, 0.98)

0.5
0.8 0.9 1.0 1.1 1.2
Scaling factor of metro investment cost

Figure 7. Effects of metro investment cost on critical population density.

investment cost increases, the resultant social welfare decreases. When the metro investment cost is scaled
to 0.8 of its baseline value (i.e., sf = 0.8), the social welfare curve of the metro intersects with that of the
BRT at the point with a critical population density of 9800 persons per square kilometer and a level of
social welfare of $32 943 per hour. When sf = 1.2, the critical population density for introducing the metro
technology is 22 400 persons per square kilometer, leading to a level of social welfare of $91 752 per hour.
Similarly, one can obtain the critical population density for the metro investment under various metro
investment costs, as shown in Figure 7. It can be observed that the critical population density increases
with the increase of the metro investment cost. It indicates that the metro investment cost has an important
effect on its investment timing.

7. CONCLUSION AND FURTHER STUDIES

In this paper, a social welfare maximization model for transit line design was proposed to address the
transit technology selection problem. In the proposed model, the transit line length, number of
stations, station location/spacing, headway, and fare were jointly optimized. A heuristic solution
algorithm for determining the design variables was developed. By comparing the levels of the
optimized social welfare for alternative transit technologies (i.e., metro, LRT, and BRT), the optimal
transit technology solution was determined together with the critical population density. The
investment timing for introduction of a new transit technology was also estimated. The proposed
modeling approach has contributed to some new insights and important findings. It has been shown
that the transit technology selection and timing for a city depend very much on its population
density. The transit technology type, urban population density, and transit market regimes can
significantly affect the optimal solutions for the transit line parameter design. The metro investment
cost can significantly affect its investment timing. The proposed model can serve as a useful tool for
planning of transit services and evaluation of various transit policies and infrastructure improve-
ments at a strategic level.
To facilitate the presentation of essential ideas and contributions of this paper, some assumptions
have been made, which should be relaxed in further studies:
(1) A linear-city assumption was made in this paper. This assumption can be relaxed to consider other
urban structures, such as radial city or rectangular city. The effects of urban structures on the transit
technology selection can thus be explored.
(2) In this paper, it was assumed that all the passengers head for the city’s center along the
corridor (i.e., a many-to-one travel pattern). The extension from a many-to-one travel demand
pattern to a many-to-many travel demand pattern is an interesting and important topic for
further study.
(3) Only one transit mode was considered, and thus, the interaction and substitution effects
between auto and transit modes were ignored. It is, therefore, meaningful to develop a

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
66 Y.-J. CHEN ET AL.

multi-modal model to incorporate the mode choice and the interaction between mixed traffic
in future research.
(4) All passengers were assumed homogenous regarding their values of time and sensitivities to the
service levels of different transit technologies. This assumption can be relaxed to incorporate
the heterogeneity of passengers in terms of their income levels and their responses to the service
levels of different transit technologies.
(5) The proposed model in this paper was focused on the decision on the selection of a single transit
technology (i.e., BRT, LRT, or metro). It is necessary to extend the proposed model to account for
a hybrid transit system with a feeder service (e.g., metro with BRT as feeder mode) to create a
more comprehensive tool for transit route planning and policy analysis.
(6) The proposed model was static (i.e., a single-period model), implying that the interest rate was
assumed to be a constant, and thus, the effects of inflation on the transit technology selection were
not considered. To address the effects of the inflation, a multi-period model should be developed,
which is left to our future study.

8. LIST OF SYMBOLS AND ABBREVIATIONS

B length of the linear transportation corridor (km)

N+1 total number of stations on the transit line
Ds distance of station s from the CBD (km)
D1 length of the transit line (km)
g(x) population density at distance x from the CBD (persons/km2)
g0 uniform population density (persons/km2)
P(x) potential passenger demand density at location x (passengers/km2)
q(x,s) actual density of passenger demand for station s at location x (passengers/km2)
Qs total passenger demand for station s (passengers)
τ average number of trips to the CBD per person per day
ϕ peak-hour factor
ux(x) passenger access time to station s from location x (hour)
ws average passenger wait time at station s (hour)
ts passenger in-vehicle time from station s to the CBD (hour)
f flat fare to the CBD ($)
ea sensitivity parameter for the access time
ew sensitivity parameter for the wait time
et sensitivity parameter for the in-vehicle time
ef sensitivity parameter for the fare
Va average access speed of passengers (km/hour)
Vt average transit vehicle operating speed (km/hour)
H headway of the transit service (hour/veh)
α calibration parameter that depends on the distributions of transit headway and passenger
arrival
Ts1 non-stop line-haul travel time from station s to the CBD (hour)
Ts2 vehicle dwell time from station s to the CBD (hour)
β0 average vehicle dwell time at a transit station (hour)
ls passenger watershed line between stations s and s+1
Ls distance of the passenger watershed line ls from the CBD (km)
W social welfare of the transit system ($/hour)
G consumer surplus of the transit system ($/hour)
Gs surplus of the consumers/passengers boarding at station s ($/hour)
G(x,s) surplus of the consumers/passengers originating at location x and boarding at station s
($/hour)
π net profit of the transit operator ($/hour)
R total operating revenue ($/hour)

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 67

C total cost of the transit system ($/hour)

CO total cost of transit operating ($/hour)
CL total cost of transit line ($/hour)
CS total cost of transit station ($/hour)
μ0 fixed component of transit vehicle operating cost ($/hour)
μ1 variable component of transit vehicle operating cost ($/veh-hour)
γ0 fixed component of transit line cost ($/hour)
γ1 variable component of transit line cost ($/km-hour)
Λ0 fixed component of transit station cost ($/hour)
Λ1 variable component of transit station cost ($/station-hour)
Θ vehicle round journey time (hour)
T0 constant terminal time on the line (hour)
ζ number of terminal times on the line
T11 total line-haul travel time for transit operations from station 1 to the CBD (hour)
T12 total dwell time for transit operations from station 1 to the CBD (hour)
K capacity of vehicles (passengers/veh)
δ average or even station spacing (km)
Ω Lagrangian function of the social welfare maximization model
η,ψ Lagrange multipliers
sf scaling factor
y average yearly growth rate of the population in the study area
t* optimal time for transit technology investment (year)
BRT Bus rapid transit
LRT Light rail transit
CBD Central business district

ACKNOWLEDGEMENTS

The work described in this paper was jointly supported by grants from the National Natural Science
Foundation of China (71171013, 71222107), the Research Foundation for the Author of National
Excellent Doctoral Dissertation (China) (200963), the Doctoral Fund of Ministry of Education of
China (20120142110044), the Center for Modern Information Management Research at the Huazhong
University of Science and Technology, and the Faculty of Construction and Environment of the Hong
Kong Polytechnic University (1-ZV4T).

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Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 69

APPENDIX A. PROOF OF PROPOSITION 1

We construct the Lagrangian function of the social welfare maximization models (28–30) as follows:
X   
N
μ 2D1
ΩðD; H; f Þ ¼ ð f  ηÞ Qs  μ0 þ 1 ζ T 0 þ þ 2β0 N
s¼1
H Vt
(A:1)
XN
K
ðγ0 þ ðγ1 þ ψÞD1 Þ  ðΛ0 þ Λ1 ðN þ 1ÞÞ þ Gs þ η þ ψB
s¼1
H

The optimal solutions for the transit line length and station location can be obtained by setting the
partial derivative of Lagrangian function Ω() with respect to Ds to zero. Then, we have

X  
∂Ω N
∂Qi XN
∂Gi 2μ1
¼ ð f  ηÞ þ  Δs þ γ1 þ ψ ¼ 0; ∀s ¼ 1; 2; …; N (A:2)
∂Ds i¼1
∂Ds i¼1 ∂Ds HV t

where Δs = 1 if s = 1, and 0 otherwise.

Note that Qs and Gs are functions of Ds, λs, Ls and Ls  1, which are functions of Ds, Ds  1 and Ds + 1,
that is,
8
< Q1 ¼ Q1 ðD1 ; D2 Þ;
>
Qs ¼ Qs ðDs1 ; Ds ; Dsþ1 Þ; ∀s ¼ 2; …; N  1 (A:3)
>
:
QN ¼ QN ðDN1 ; DN Þ

and
8
< G1 ¼ G1 ðD1 ; D2 Þ;
>
Gs ¼ Gs ðDs1 ; Ds ; Dsþ1 Þ; ∀s ¼ 2; …; N  1 (A:4)
>
:
GN ¼ GN ðDN1 ; DN Þ

Hence, the following equations hold:

∂Qi
¼ 0; ∀i ≠ s  1; s; s þ 1 (A:5)
∂Ds

and
∂Gi
¼ 0; ∀i ≠ s  1; s; s þ 1 (A:6)
∂Ds

Substituting Equations (A.5) and (A.6) into Equation (A.2), one immediately obtains

8  
> X 2
∂Qi X 2
∂Gi
>
> ð  ηÞ þ 
2μ1
þ γ þ ψ ¼ 0;
>
> f
>
> ∂D1 i¼1 ∂D1 HV t 1
>
>
i¼1
>
< Xsþ1
∂Qi Xsþ1
∂Gi
ð f  ηÞ þ ¼ 0; ∀s ¼ 2; …; N  1; (A:7)
>
> ∂D ∂D
>
> i¼s1 s i¼s1 s
>
>
>
> X N
∂Qi XN
∂Gi
>
> ð  ηÞ þ ¼0
: f
∂DN i¼N1∂DN
i¼N1

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
70 Y.-J. CHEN ET AL.

The partial derivative of Lagrangian function Ω() with respect to headway H is

X   X
∂Ω N
∂Qs μ1 2D1 N
∂Gs K
¼ ð f  ηÞ þ 2 ζ T0 þ þ 2β0 N þ η 2 ¼0 (A:8)
∂H s¼1
∂H H Vt s¼1
∂H H

where Q1 and G1 are functions of L0, which is a function of λ1 by Equation (13), and thus a function of
headway H in terms of Equation (12). However, Ls (s = 1, 2, …, N) is independent of headway H
according to Equation (8). In addition, Qs (s = 2, …, N) and Gs (s = 2, …, N) are functions of λs, which
is a function of H in terms of Equation (12). Accordingly, we have

Ls1
∂Qs
∂H
¼ αew ∫ Ls PðxÞdx; ∀s ¼ 1; 2; …; N (A:9)

and

∂Gs αew
¼ Q ; ∀s ¼ 1; 2; …; N (A:10)
∂H ef s

Substituting Equations (A.9) and (A.10) into Equation (A.8), one obtains

vffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi

 ffi
u
u μ1 ζ T 0 þ V t þ 2β0 N  ηK
2D1
u
H¼u (A:11)
u X Ls1
X
∫
N N
t αew
αew ð f  ηÞ Ls PðxÞdx þ ef Qs
s¼1 s¼1

The partial derivative of Lagrangian function Ω() with respect to fare f is

∂Ω X N XN
∂Qs X N
∂Gs
¼ Qs þ ð f  ηÞ þ ¼0 (A:12)
∂f s¼1 s¼1
∂f s¼1
∂f
where

Ls1
∂Qs
∂f
¼ ef ∫ Ls PðxÞdx; ∀s ¼ 1; 2; …; N (A:13)

and

∂Gs
¼ Qs ; ∀s ¼ 1; 2; …; N (A:14)
∂f

Combining Equations (A.12, A.13, A.14) yields

f ¼η (A:15)

Substituting Equation (A.15) into Equations (A.7) and (A.11), one obtains the optimal transit line
length, station location, headway, and fare solutions, as shown in Proposition 1.

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
 MODELING TRANSIT TECHNOLOGY SELECTION 71

APPENDIX B. PROOF OF PROPOSITION 2

Define δ as the average station spacing of the transit line, then Ds = (N + 1  s)δ, Ls = (N  s + 0.5)δ
(s = 1, 2, …, N), and L0 ¼ Nδ þ Veaa λ1 . When the population density is uniformly distributed with the
density of P0, we can obtain the passenger demand and customer surplus for station s as follows:
8
> P0 V a 2 P0 P0 ea 2
>
< Q1 ¼ λ1 þ λ1 δ  δ;
2 ea 2 8 Va
(B:1)
>
> P e
: Qs ¼ P0 λs δ  0 a δ2 ; ∀s ¼ 2; …; N
4 Va

and
8  !
>
> P0 V a δ ea 3
>
> G ¼ 2λ1  λ1 
3
;
>
< 1 6ef ea 2V a
>   ! (B:2)
>
> P0 V a 3 δ ea 3
>
: Gs ¼ 3ef ea λs  λs  2V a
> ; ∀s ¼ 2; …; N
where

et
λs ¼ 1  ew αH  ef f  ðN þ 1  sÞ δ þ et β0 ; ∀s ¼ 1; 2; …; N: (B:3)
Vt
Given the number N of stations, headway H, fare f, and population density P0, the optimal average
station spacing solution can be derived as follows.
 
∂Ω X N
∂Gs 2μ1
¼  þ γ1 þ ψ N (B:4)
∂δ s¼1
∂δ HV t

where

8  3  2  !
>
> ∂G1 P0 V a et 3 et 3 ea et 1 ea 2 2
>
> ¼  N þ N þ Nþ δ
>
> ∂δ
>
> 2ef ea V t 2 Vt 4V a V t 8 Va
>
> !
>
>  2
>
> P0 V a et et 1 ea

>
>   N þ Nþ 1  ew αH  ef f  et β0 N δ
>
>
>
> ef ea V t Vt 4V a
>
>  
>
>
2
< P0 V a et
þ 12 N 1  ew αH  ef f  et β0 N ;
4ef ea V t
> (
>
>
>  2  !
> ∂Gs
> P0 et 3 et ea 1 ea 2 2
> 2
> ∂δ ¼ 2ef
>
>
3ðN þ 1  sÞ
Vt
þ ðN þ 1  sÞ
2
þ
Vt Va 4 Va
δ
>
>
>
>    
>
> 2
4et ea
 ea
>
> þ ð þ  Þ 2 et
β  ð þ  Þ  αH   β   αH  δ
>
>
4 N 1 s
Vt 0
N 1 s 1 e w e f f
Vt Va 0
e t 1 e w e f f
>
> o
Va
>
>

2
: 2 2
þðN þ 1  sÞ ðet β0 Þ  2ðN þ 1  sÞ 1  ew αH  ef f et β0 þ 1  ew αH  ef f ; ∀s ¼ 2; …; N

(B:5)

Substituting Equation (B.5) into Equation (B.4) and carrying out some algebraic operations, we
obtain the average station spacing solution as follows:

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr
72 Y.-J. CHEN ET AL.

pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
a2  a2 2  4a1 a3
δ¼ (B:6)
2a1

where

8  2   2  3 !
>
> P 1
 e 3 e e 1 1 e e Va
>
> a1 ¼
0
N 2N þ 1
2 t
þ N 2 t a
þ N
a

t
N ;
>
> 2e 2 V 4 V V 4 2 V V ea
>
>
f t t a a t
>
>  
>
> P0 1
 ea
 et 1 2 ea
>
> ¼   1  ew αH  ef f þ 2N 2 1  ew αH  ef f  N et β0
>
>
a2 N
>
> 2e f 2 V a V t 2 V a
>
<   !
2
 e2 e3 V a et 2

V a
>  N 2N 2 þ 1 β0 t þ2N 3 β0 t2 2 N 1  ew αH  ef f ;
>
> 3 Vt V t ea Vt ea
>
>
>
>     
>
> P V a et 1
2 V a et

> a3 ¼ 0
> 1  N  1  e αH  e f  1  2 1  ew αH  ef f et β0 N 2
>
> 2ef ea V t 2
w f
ea V t
>
>      
>
>
>
> 1 V a et 1 2μ1
: þ 13 N 2 þ e2t β20 N  N þ γ1 þ ψ
3 ea V t 2 HV t
(B:7)

APPENDIX C. PROFIT MAXIMIZATION MODEL

According to Li et al. [20], under the private regime, the principal objective of the private transit
operators is neither welfare gain nor the efficient utilization of transit vehicles, but rather profit
maximization. The profit maximization model can be formulated as

X   
N
μ1 2D1
maxπ ðD; H; f Þ ¼ f Q s  μ0 þ ζ T0 þ þ 2β0 N
s¼1
H Vt (C:1)
ðγ0 þ γ1 D1 Þ  ½Λ0 þ Λ1 ðN þ 1Þ

XN
s:t: H ≤ K= s¼1 Qs (C:2)

D1 ≤ B (C:3)

where the objective function (C.1) is defined in Section 2.3.2. Equation (C.2) and Equation (C.3) are,
respectively, the capacity constraint and the transit line length constraint, as defined in Equations (29)
and (30).

Copyright © 2014 John Wiley & Sons, Ltd. J. Adv. Transp. 2015; 49:48–72
DOI: 10.1002/atr