Mechanism Design for an Incentive Subsidy Scheme for Bus Transport

Round  1

Reviewer 1 Report

The study addressed a common problem that a lot of public sectors and bus operators are facing today, the introduced incentive subsidy scheme is tested in the case of Kumamoto, and it is well elaborated with fine language skill. The finding is recommended to be published with minor revision. 

I have to admit my knowledge background cannot give the best evaluation of the mathematic calculation, I believe reviewers will give good comment on this part of the content.

From my perspective, other comments as follow:

the research problem is well defined under the Japanese context, however, there is a missing of argument about how does the problem has been tackled in the other cities around the world, and which research gap the study is bridging in the international research context. This issue should be argued in the introduction part before introducing the model. 

The conclusion is well formulated. Similar issue as the last comment, I would expect a discussion/reflection on what could international research committee and practitioners learn from this study,  and what is the innovative contribution of this scheme compare with existing solutions around the world. So the study will not only be useful in a Japanese context, but could also be world wide. 

Author Response

Thank you very much for reviewing our manuscript “Mechanism Design for Incentive Subsidy Scheme to Bus Transport” (ID: sustainability-432087) and your appreciation for our work. Your comments and questions are valuable for improving the quality and readability of our manuscript as well as for improving our study on this topic. We have substantially revised our manuscript according to the comments and questions provided by reviewers. In order to clarify the revision, all revised contents are denoted in red characters and all deleted parts in blue fonts with double deleted lines. Please review the revised manuscript.

Point 1: The study addressed a common problem that a lot of public sectors and bus operators are facing today, the introduced incentive subsidy scheme is tested in the case of Kumamoto, and it is well elaborated with fine language skill. The finding is recommended to be published with minor revision.

Response 1: Thanks for your appreciation for our work and your valuable comments.

Point 2: there is a missing of argument about how does the problem has been tackled in the other cities around the world, and which research gap the study is bridging in the international research context. This issue should be argued in the introduction part before introducing the model.

Response 2: Thanks for this valuable comment, which improves the logics of our literature review. According to your comment, we revised related literatures on how the problem was tackled in other cities, like London and Curitiba. And we also discussed disadvantages and advantages among different subsidy schemes in the introduction section.

Point 3: Similar issue as the last comment, I would expect a discussion/reflection on what could international research committee and practitioners learn from this study,  and what is the innovative contribution of this scheme compare with existing solutions around the world. So the study will not only be useful in a Japanese context, but could also be world wide.

Response 3: Thanks for the valuable comment. We have added the discussion in the introduction and the conclusion about the innovative contribution of our scheme comparing with the existing solutions around the world.

The above responses are our reply to the reviews from reviewer 1. We look forward to hearing further information from you.

Best regards

Wenqian ZOU

Author Response File: Author Response.docx

Reviewer 2 Report

This is an interesting paper that discusses the design and implementation of public transport subsidies. The paper does provide relevant insights from an interesting model proposal analysing the costs and potential social benefits of incentive-based subsidy schemes. The paper is well-organised and for the most it has clearly explained objectives and methods.

However, I feel the context is not sufficiently explained and more information is needed regarding the system's and urban conditions in which the discussed schemes are implemented. There is a fair amount of context information and potential explanatory factors that are left out of the paper that can probably be introduced by the authors in a revised version. Examples of such factors are average travel distances, competition with other forms of public transport, seasonality of the demand, urban form and geographical distribution of opportunities. The conclusion also needs to be expanded in order to include a larger discussion of policy implications and future avenues of research.

Author Response

Thank you very much for reviewing our manuscript “Mechanism Design for Incentive Subsidy Scheme to Bus Transport” (ID: sustainability-432087) and your appreciation for our work. Your comments and questions are valuable for improving the quality and readability of our manuscript as well as for improving our study on this topic. We have substantially revised our manuscript according to the comments and questions provided by reviewers. In order to clarify the revision, all revised contents are denoted in red characters and all deleted parts in blue fonts with double deleted lines. Please review the revised manuscript.

Point 1: This is an interesting paper that discusses the design and implementation of public transport subsidies. The paper does provide relevant insights from an interesting model proposal analysing the costs and potential social benefits of incentive-based subsidy schemes. The paper is well-organised and for the most it has clearly explained objectives and methods.

Response 1: Thanks for your appreciation for our work and your valuable comments.

Point 2: I feel the context is not sufficiently explained and more information is needed regarding the system's and urban conditions in which the discussed schemes are implemented. There is a fair amount of context information and potential explanatory factors that are left out of the paper that can probably be introduced by the authors in a revised version. Examples of such factors are average travel distances, competition with other forms of public transport, seasonality of the demand, urban form and geographical distribution of opportunities. The conclusion also needs to be expanded in order to include a larger discussion of policy implications and future avenues of research

Response 2: Thanks for this valuable comment, which improves the quality and readability of our manuscript. According to the comment, we added the competition with other forms of public transportation, length of bus lines, and bus use ratio. We didn’t consider factors like seasonality of the demand, urban form and geographical distribution of opportunities. We studied how the subsidy scheme worked under the same service level. However, these factors that the reviewer suggested, are of interest, and we will consider and discuss them in our future papers. We added the discussion in the conclusion section about policy implications and the further research considering the changing demand with different service level in the future. Thanks again for your valuable comments.

The above responses are our reply to the reviews from reviewer 2. We look forward to hearing further information from you.

Best regards

Wenqian ZOU

Author Response File: Author Response.docx

Reviewer 3 Report

This paper discusses the topic of proposing a new subsidy schene for public transport that is based on the idea of reducing deficits - a currently identified problem in Japan as a case study - in order to alleviate the financial burden from the government. The auhtors apply a Laffront-tirole model to address their problem and perform several computational tests and empirical analyses - under complete and incomplele information - in order to identify the sensitivity of the results to the different components of their model and derive tangible results. 

Overall, the topic is important, the idea of the approach is interesting and the experiments are well outlined. The scope is also relevant to the journal, with a direct link to sustainable societies. However, I believe that the state of the art is not sufficiently covered, which makes it hard for the reader to identify the novelty of the work. Furthermore, several assumptions that are made along the modelling and the tests are not accompanied by supporting arguments, which also raises questions about the soundness of the results. More details are outlined below. In my opinion, these are important issues that need to be addressed by the authors. Also, I believe that the language should be thoroughly revised. Given the amount of required work, I identify it as a 'major review'.

Detailed comments:

- The introduction to public transport subsidies in Section 2 should be significantly more elaborate and give more insights. There are many scheme of public subsidies that have not been covered by the authors (e.g. the provision of infrastructure, differences in fuel taxation as well as VAT exemptions etc.) nor the difference between them and the direct funding scheme that is considered in the paper. Refer to this report for more information about subsidies in Europe: European Environment Agency (2007). Size, structure and distribution of transport subsidies in europe, and perhaps look for similar sources for Asia.

- The contribution of the authors to the model presented in Section 2 is not clear. Is this the classic formulation? Have any significant adaptations been imported to it to suit the application?

- More information should be given about the disutility of effort in Section 3.3. Why is it difficult to identify and why the previous formula in the literature is not applicable?

- The survey among the 4 bus operators: could the small number of operators be limiting the analysis? In other words, how would the results change if a larger set of operators had been surveyed?

- It is not clear how the maximum likelihood estimation model has been solved. Has a certain off-the-shelve software been used for that? I believe this information should be mentioned.

- Subsidies under imperfect information: It is not clear how the disutility formula (3.6) has been constructed. If this is a classic formula, a reference should be included.

- How have the different levels of deficit in lines 247-248 been achieved? Could other chosen values change the results? Especially that it is mentioned in line 255 that its levels of distribution affect the results.

- The statement made about non-transparent information in line 262 is not clear. How is that meaningful for the actual practices?

- The value of the shadow cost (line 269) is said to be in accordance with standard research. Any supporting references to this argument?

- Why the range of the normal distribution of beta is assumed to be 6% (line 276).

- Are there any supporting references for the bus lines length and deficits considered in the sensitivity analysis (Line 286 onwards)?

Additionally:

As mentioned, the English language should be revised in details, in particular in what concerns the sentences' structures. As examples in the paper: Lines 49-50, 80-82, 96-97, 172-173, 325-326...

The formatting of the model starting at Line 84 should be adjusted.

The spacing should be revised. As examples: the section title (!) 3.2, Lines 252-253, 280, 301...

Author Response

Author Response File: Author Response.docx

Round  2

Reviewer 3 Report

Thank you very much for your effort in answering all my previous questions and suggestions. One could clearly see how the paper has improved. One final minor remark would be to revise the alignment of the equation labels of equations 2.1 until 2.15 and 3.2-3.3.

I have no further comments.

Author Response

Thank you very much for reviewing our manuscript “Mechanism Design for Incentive Subsidy Scheme to Bus Transport” (ID: sustainability-432087) and your appreciation for our work. Your comments and questions are valuable for improving the quality and readability of our manuscript as well as for improving our study on this topic. We have substantially revised our manuscript according to the comments and questions provided by reviewers. Please review the revised manuscript.

Point 1: One final minor remark would be to revise the alignment of the equation labels of equations 2.1 until 2.15 and 3.2-3.3.

Response 1: Thank you for your good suggestion. The formatting issues are also corrected. Thanks again for your good suggestion.

The above responses are our reply to the reviews from reviewer 3. We look forward to hearing further information from you.

Best regards

Wenqian ZOU