Students with a disability at the Northern School for Autism in Victoria are spending less time travelling to and from school, thanks to a pilot project by the Centre for Market Design and partners, to improve transport.
The CMD partnered with the California Institute of Technology (Caltech) to design and implement a trial that applied economic design techniques to improve student travel services. The trial incorporated student travel service and quality requirements into an auction to allocate and price transport services for students with a disability. New computational techniques were developed to formulate bus routes and an auction was designed to efficiently allocate and price the routes. This process resulted in a significant improvement in the quality of student travel services with no increase in price. It dramatically cut average travel times for students, reduced the maximum travel time for any student from 2 hours (each way) to 50 minutes and increased the education time for participating students by around 200 hours per year, thanks to timely arrival of buses.
The trial was funded by the Victorian Department of Education and Training who manage student travel services on behalf of the National Disability Insurance Scheme. The objectives of the project were to demonstrate how economic design techniques can be used to improve the quality of disability services and harnesses competition to reveal fair and efficient prices.
The Centre’s Director of Policy, Gary Stoneham, worked with partners including Professor Charles Plott at Caltech on this project, which is an example of how fit-for-purpose mechanisms can make a positive difference to the quality and cost-effectiveness of services provided by government.