Buses bring economic benefits

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The benefits of bus commuting are many, not least of which are economic ones. Opportunity cost analyses on investments in bus transport in Penang show that there is much to be gained socially and economically. A policy that comprehensively rewards investments in buses and bus commuting is needed.

Introduction

It is not customary for Malaysians to see cost and benefit reports for public investments, even though fiscal spending on development projects has gone on for decades under Malaysia’s five-year plans. The issue of public investments is whether money should be diverted through taxes from the private sector to fund public projects or if it is better to leave the private sector to invest on its own.

The answer lies in what is referred to as the shadow price (the opportunity cost) of public investments. Each tax dollar diverted from the private sector is forever lost in terms of private sector returns.


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