Would bus passengers benefit from a system in which drivers were paid per rider? Prior to 2007, some bus drivers in Santiago, Chile, were compensated per passenger, while others got a fixed wage, allowing for a comparison, says a team led by Ryan M. Johnson. Compared with the fixed-wage system, per-passenger compensation led to 13pc shorter passenger wait times via reduced bunching of buses. However, it also led to 67pc more accidents per kilometer driven, because of more-aggressive driving.

(Source: Economic Inquiry)

Published in Dawn, Economic & Business, June 29th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play