Analysis of Loyalty and Cost-Efficiency Demand for Inter-City Public Transportation in Ghana

What is it about?

This paper explores the cost-efficiency demand-driven passenger loyalty factors that explain variations in patronage of inter-city public transportation (PT) in Ghana. Given the absence of a significant rail transport system in Ghana, PT is predominantly road-based. The study focuses on inter-city PT because the industry now faces new challenges in attracting and retaining passengers due to competition with private hiring vehicles, and other related private transport service providers in recent years. A sample of 2,431 respondents across the 16 geopolitical regions of Ghana, and based on the Structural Equation Modelling analytical framework, we test the hypothesis that there is an interaction between cost-efficiency demand-driven passenger loyalty factors and passenger loyalty in the PT system of Ghana. Accordingly, the question as to whether and how cost-efficiency demand-driven passenger loyalty factors impact passenger loyalty to PT in Ghana has been empirically examined. The Smart PLS 3.3.2 and SPSS version 22 software were used for the analysis of the data collected through questionnaires. Broadly, the findings reveal that, in Ghana, loyalty rather than cost-efficiency demand factors impact inter-city public transportation service delivery. The empirical results show that two-thirds of the total variations in demand-driven passenger loyalty are accounted for by operation, personnel service, on-board conditions, the image of public transportation type, service delivery, cost (service value), switching cost, and cost-efficiency demand factors. Invariably, overcoming the threats to maximising revenue and sustaining the efficiency within the Ghanaian inter-city public transportation system is internal and customer satisfaction oriented rather than regulatory environment and other external factors. Impliedly, demand-driven passenger loyalty deduced from customer satisfaction is a necessary condition for sustainable revenue maximisation and operationalisation of PT in Ghana. Based on this result, it is recommended that the private sector-led public transport operators should eschew monopolistic tendencies and endeavour to constantly engage passengers in a bid to meet their expectations and needs that maximise their satisfaction as clients at all times.

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Why is it important?

This used a sample size of 2,431 from all the regions of Ghana. The study further adopted a comprehensive and robust analytical framework to arrive at the empirical results. It is further important because it adopts a multi-disciplinary approach which resulted in its high value and policy implications for various stakeholders with the public transportation system of Ghana and possibly other developing countries with similar characteristics

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