Abstract:

Taking the reduction of operation cost of the public transport enterprise and the improvement of its service level as targets, and its standard cost and minimum service level as benchmarks, an improved principal-agent incentive model was built based on the traditional principal-agent theory and the improved incentive contract of the government subsidy. The model was validated by a case study. The results provide a theoretical basis for the government to encourage the public transport enterprise and improve the financial subsidy mechanism.

Key words: transport economics, subsidy mechanism, incentive model, standard cost