Allocating the transport subsidy based on the social contribution of public transport enterprises

An important problem in public transport is the allocation of transport subsidies among public transport enterprises (PTEs) fairly. The social contribution of the public transport industry is emphasized by governments because of its commonweal feature. This paper first defines the mathematical expression of the social contribution by utilizing multidimensional performance indicators, and deduces a set of constraints based on the proportional allocation concept (that is, the subsidy proportion allocated to each PTE should be equal to their social contribution proportion). The constraint set is the same as the efficient allocation set from the standpoint of data envelopment analysis. Then an allocation model is proposed by minimizing the maximum distance between the allocation plan preferred by the government administration department and our allocation plan. In general, the preferential allocation plan may be inconsistent with PTEs social contributions. Finally, a real example is presented to illustrate our approach.