We show that optimal public transport subsidy is sensitive to the use of alternative user cost models, and that a model based on cost minimisation principles may lead to an improvement in subsidy estimates. For the case of homogeneous consumers and non-peaked demand, the cost minimisation user...

The aim of this paper is to study the effects of credit constraints on the equilibrium aggregate capital stock. Credit constraints are the consequence of asymmetric information and moral hazard on the credit markets. When the equilibrium interest rate is low, entrepreneurs may have the...