This paper discusses a model which can be used as an assessment tool when designing transport policy, regarding bus transport in Japanese cities. An original survey of seventeen bus companies, operating in different cities was conducted and a cost model and demand model of high precision were estimated. Applying these models to particular operators, each having their own operating and environmental characteristics, the effect of changing the level of service (in terms of network density and frequency) on profitability and total surplus was estimated. By mapping isovalue curves of profitability and total surplus it is possible to project he direction that service level should be changed in order to improve profit levels or to increase total surplus.