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On March 3, 2013, the single ride fare on the NYC subway rose from $2.25 to $2.50. Some uproar ensued and the NY Daily News ran an article about furious straphangers asking people with unlimited Metrocards to give free swipes [1].

But how expensive is the subway really?

The subway opened in 1904, and a trip cost 5 cents. The price did not change until 1948, when it doubled to 10 cents. After that the price climbed steadily, passing $1 in 1986 and $2 in 2003 [2][3]. Figure 1 lists the historical prices of single fare rides, in nominal terms (the actual price you had to pay in dollars for a trip).

1-nominal

Figure 1 – Nominal fare prices

So it looks like subway prices keep climbing, but that does not take into account that one dollar today does not go as far as one dollar five decades ago, due to inflation. Using the consumer price index (CPI) we can calculate how much a 5 cent ticket back in 1904 would cost in today’s dollar value and we see that it’s actually $1.35 [4][5]. Thus the real value of 5 cents in 1904 in 2013 dollars is $1.35, when adjusting for inflation. Figure 2 graphs the real prices of historical subway fares as measured in today’s dollar value.

2-cpi

Figure 2 – Nominal and real fare prices

When adjusting for inflation, we can see that a subway ride was cheapest during the 1920s up until 1948 (when the price increased from 5 cents to 10 cents). Deflation during the great depression helped push the real price of a ride down, and it stayed low until WWII. Overall there is an upward trend in the price of a ride, which indicated that the real cost of riding the subway has gone up, albeit not very steeply.

Looking just at inflation only tells part of the story. We are today overall richer than before and even if prices have gone up we can afford more of everything. One measure of how rich a country overall is is to look at gross domestic product per person (GDP/capita), which is more or less the total value of all goods and services produced per year divided by the population size. We can look at how many subway rides each person could buy with their yearly GDP share [6][7]. This lets us compare how rich we were at different time periods in terms of how many subway rides we could theoretically buy per year (figure 3).

Figure 3 - Fares by GDP/capita

Figure 3 – Fares by GDP/capita

We can see that from the end of the Great Depression until 1947 the number of rides we could afford increased significantly as the economy roared back and the price of a ride stayed at 5 cents. From the 1970s the number of trips available has stayed more or less constant. This means that the price of a ride has grown more or less at the same pace as our economy. We can pretty much afford the same number of trips today as we have been able to during the last 50 years.

To dig down a bit more, we can look at actual reported incomes of the population. I could not find data that went all the way back to the start of the subway and had to settle for looking at 1947 (coincidentally the year before the first fare increase) to 2011 [8]. GDP or income per capita is an average, and takes no account into how the money is distributed (how unequal we are). We know that inequality in the US has increased in the last decades, so even if the average income has gone up, gains have mostly accrued at the top, which means that the majority of people may not have more money for fare tickets now than previously. A simple way to slightly mitigate this problem is to look at median incomes (the amount at which 50% of the population makes more and 50% makes less). We can now say “a person that makes more than exactly half the population can afford these many rides in a given year”. The data also came broken out by sex, allowing us to do a little side study of gender income inequality.

Figure 4 - Median income by sex

Figure 4 – Median income by sex

Figure 4 shows that, again, subway rides were the most affordable in 1947 before the first price increase. After that for males (the blue line) the affordability of subway rides has slowly been decreasing. For women, we see the gender gap in pay, with women consistently making less than their male counterparts, thus being able to afford fewer rides. Women’s wages have grown faster than men’s in the last decades, though starting from a much lower level, and still lag male wages. The faster growth in female wages have allowed them to afford more or less the same number of rides since the 1950s.

The reason figure 4 shows that price tickets are becoming slightly less affordable (for men) while figure 3 shows that affordability has remained more or less constant is the increase in inequality. Some people can today afford a lot more subway rides than previously, while the majority of men can now afford slightly fewer rides.

Subway prices have become less affordable in general, but the drop in affordability is slight, and driven by inequality, not actual fare increases, and this does not take into account free transfer between buses and subway (started in 1997) and unlimited 30-day cards (introduced in 1998) that allows heavy users to further cut down the price per ride.

In summary, the subway has not become more expensive in the last decades, especially if you ride much and purchase an unlimited 30-day card, or can take advantage of transit checks to pay for your rides with pre-tax money.

Other fun things to look at would be to compare gas prices to subway prices, service levels (number of lines and stations) over time. Additionally, this little study uses national data, and NYC is usually an outlier in most demographic variables, including incomes. I’d like to look at this using only NYC data. But these points are for another day. 

Note: the graphs other than the nominal price have received some smoothing to not look so jagged, since only one data point per year was used. The overall analysis is not impacted by this.

References:

[1] NY Daily News – MTA fare hikes set to take effect Sunday: Subway riders campaign to ‘swipe back’ against increased fees

[2] Staten Island Advance – A history of MTA fare hikes

[3] Wikipedia – New York City transit fares

[4] Lawrence H. Officer and Samuel H. Williamson, “The Annual Consumer Price Index for the United States, 1774-2012,” MeasuringWorth, 2013.

[5] The U.S. Economic Outlook for 2013–2014 Executive Summary: November 2012

[6] Louis Johnston and Samuel H. Williamson, “What Was the U.S. GDP Then?” MeasuringWorth, 2013.

[7] World Economic Outlook (WEO) data, IMF

[8] US Census Bureau, Historical Income Tables: People

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