The handicapped and pensionaries now receive free coach travel across Scotland, with no limitations on when they can go. The coach operators receive 73.6 % of the mean grownup individual menu for each journey by a pensionary or handicapped traveller. The concessionary travel strategy was capped in February 2010 to ?174.2m in the following fiscal twelvemonth, lifting to ?187m in 2012/13. This study will see different facets of researching how markets work and more specifically – free coach travel for pensionaries and handicapped people in Scotland. First of wholly, this study will look at demand and supply analysis and the effects of the free coach travel for pensionaries and handicapped people on the market for train journeys, market for taxis and market for visitant attractive forces will be explained, so the chance cost of the current policy and the advantages and disadvantages of this system will be introduced and eventually, a critical rating of different statements and our recommendations for the hereafter will be given. This subject is really relevant to the economic system and society today as there are immense budget cuts being made right now and the authorities has to reconsider every individual penny to apportion the support to the most necessary issues.
Demand and supply is the relationship between the measure of a trade good that manufacturers have available for sale and the measure that consumers are willing and able to purchase. Demand depends on the monetary value of the trade good, the monetary values of related trade goods, and consumers ‘ incomes and gustatory sensations. Supply depends non merely on the monetary value obtainable for the trade good but besides on the monetary values of similar merchandises, the techniques of production, and the handiness and costs of inputs. The consequence of the current free coach travel strategy on market for train journeys, market for taxis and market for visitant attractive forces utilizing the demand and supply analysis will now be explained.
Consequence on market for train journeys –
Substitution consequence refers to the alteration in measure demanded of a merchandise ensuing entirely from a alteration in the monetary value when the consumer ‘s existent income is held changeless. The permutation consequence can be seen with the market for train journeys as the pensionaries and handicapped people will take the cheaper service, in this instance the free coach travel.
First the demand goes down ( D1 displacements to D2 ) and the supply stays the same, the monetary value goes down ( P1 ) so that train journeys could remain in the market and when there is non every bit much demand, the supply goes down every bit good ( S1 displacements to S2 ) when, therefore the monetary values travel up ( P2 ) and it balances out.
Consequence on market for Taxis –
Second, the consequence of the free coach travel strategy on the market for taxis is that demand goes down a small spot ( D1 displacements to D2 ) and supply stays the same while the monetary value goes down ( P1 ) every bit good and when the monetary value is down more people want to utilize taxis so the supply is decreased ( S1 displacements to S2 ) and the monetary value goes up once more ( P2 ) .
Consequence on market for Visitor attractive forces –
And thirdly, the free coach travel strategy consequence on the market for attractive forces is that the demand goes up ( D1 displacements to D2 ) while supply stays the same and the monetary value besides goes up ( P1 ) , when there ‘s more demand than supply, the supply additions ( S1 displacements to S2 ) and the monetary value goes down ( P2 ) making a new equilibrium.
The group looked at some statements for and against alterations the authorities could do to the strategy in order to salvage money. The suggested alterations were:
curtailing concessionary travel to off-peak times
shuting the strategy to those between the ages of 60 and 65
enforcing a bound on the entire figure of journeys that users may set about
There are positive and negative sides to each of these alterations that need to be taken into consideration.
If concessionary travel were restricted to off-peak times, those pensionaries who can afford to pay for their coach ticket and take to go during peak times despite holding a free base on balls for off-peak times would lend towards the support of the strategy. Buss that are already filled to capacity in the forenoon and eventide would non be even more overcrowded because free coach base on balls holders possibly would wait to go during off-peak times instead than pay the full monetary value of a ticket. This means that regular, paying clients would non hold to look for alternate conveyance methods to acquire to and from their topographic point of work in a time-efficient mode during these times. This alteration would besides take to a more even distribution of traffic – coachs would acquire used more during off-peak times and there would non be a demand for extra coachs during peak times.
On the other manus, curtailing concessionary travel to certain times of the twenty-four hours would besides curtail coach base on balls holders who rely on free travel in their freedom. Scheduling early forenoon assignments, for illustration for medical trials that need to be done on an empty tummy, would go more hard. This alteration could besides hold a negative impact on household attention, as pensionaries might non be able to convey their grandchildren to school or expression after them if their parents have to work early in the twenty-four hours.
The effects of the authorities shuting the strategy to those between the ages of 60 and 65 appear mostly positive at first. Many people in this peculiar age group are still employed and therefore can still afford to pay for public conveyance. It is besides likely that senior citizens who are still working or hold merely retired would still be physically active irrespective so there is no demand for the authorities to give a free coach base on balls to them as an inducement. They might besides still drive themselves and might non trust on public conveyance every bit much as aged pensionaries who do non drive any longer.
However, it needs to be taken into consideration that non all people between the ages of 60 and 65 still work. For these people this alteration to the strategy could once more hold a negative consequence on household attention. They would besides look to be the most likely to make voluntary work and be the most active and productive out of all pensionaries, nevertheless, they might non be willing to volunteer at all if they have to pay to go to and from their topographic point of voluntary work. If this alteration were implemented, it would besides be unsure how much money the authorities would salvage as everyone above the age of 65 could still go every bit much as they wanted, and as people get older and older this could intend that the authorities would stop up paying more regardless.
On the contrary, if the authorities were to enforce a bound on the entire figure of journeys that users may set about, it would cognize how much money it could salvage as it would cognize precisely how much money it would pass if all free coach base on balls holders were to set about all their allowed free journeys. Adding to that, no age group would be deprived of free travel. Pass holders might do their journeys more efficient and salvage them for more of import trips instead than utilize them to take the coach one halt down the street. They might besides be more active because they might desire to really do usage all their free journeys before they expire at the terminal of the month.
On the other manus, this alteration might deter people from making voluntary work because they might desire to utilize their journeys for something they personally enjoy more. It could besides negatively affect touristry. As has been pointed out in the 3rd graph earlier in the study, the demand and therefore the supply for tourer attractive forces go up if there is a concessionary travel strategy. However, if people could non set about as many journeys any longer, there would be less demand for tourist attractive forces and hence excessively much supply. Restricting the figure of journeys users may set about might besides take to people salvaging their journeys alternatively of utilizing them in instance they need them for something of import, merely to hold them run out at the terminal of the month. This might deter pensionaries from being active.
In add-on to sing the tops and downsides of these suggested three alterations, the group besides thought of recommendations to the authorities on how the strategy could be made more financially efficient.
Free base on ballss could merely be made available to people who rely on public conveyance to lend to society, for illustration through voluntary work, go forthing discounted tickets or a limited figure of free journeys to those who do non. The authorities could do off-peak travel free, but charge a decreased monetary value for peak clip tickets, or limit the figure of free journeys but do them useable on all public conveyance, and give base on balls holders a limited figure of taxi verifiers per month. Travel could be discounted during the hebdomad and free on weekends, or free during the hebdomad but full monetary value on weekends. The authorities could besides give one day-travel ticket per hebdomad to pensionaries, but promote local councils to organize free twenty-four hours trips on the weekends that merely a limited figure of people could subscribe up for. This manner, pensionaries would still be able to run their errands during the hebdomad and acquire the opportunity to be active on the weekend. Free coach base on ballss could besides merely be made available to those with low pensions.
This study has considered assorted effects of the free coach travel for pensionaries and handicapped people on the economic system, including account of the effects of this policy on different markets utilizing the supply and demand analysis ; the chance costs of this policy have been presented ; the advantages and disadvantages of this policy have been considered and alternate strategies have been examined, every bit good as future recommendations have been made. There are many different options that authorities could implement alternatively of the current system, for illustration, they could present new strategies or they could re-evaluate the chance cost of this strategy, for illustration, invest in route fixs or in old peoples ‘ houses. There are besides betterments to be made to the current system that have to be considered as we suggested when discoursing the disadvantages of the current free coach travel for pensionaries and handicapped people system and our recommendations for future. Similar strategies could besides be introduced, for illustration, the authorities could enforce a bound on the entire figure of journeys that users may set about.
The benefits of the current system in our position decidedly outweigh the costs because the UK ‘s ageing population is supplying a multi-billion lb encouragement to the state ‘s economic system each twelvemonth. Peoples aged between 60 and 80 contribute more than ?59bn yearly to the UK economic system in revenue enhancements, voluntary work and household attention, harmonizing to the largest survey of older people of all time carried out. And the approximative 185 million a twelvemonth for free coach travel is non that much at all, compared to their 59bn lb part to the economic system.
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