The effects of high passenger density at bus stops, at rail stations, inside buses and trains are diverse. This paper examines the multiple dimensions of passenger crowding related to public transport demand, supply and operations, including effects on operating speed, waiting time, travel time reliability, passengers’ wellbeing, valuation of waiting and in- vehicle time savings, route and bus choice, and optimal levels of frequency, vehicle size and fare. Secondly, crowding externalities are estimated for rail and bus services in Sydney, in order to show the impact of crowding on the estimated value of in-vehicle time savings and demand prediction. Using Multinomial Logit (MNL) and Error Components (EC) mod- els, we show that alternative assumptions concerning the threshold load factor that trig- gers a crowding externality effect do have an influence on the value of travel time (VTTS) for low occupancy levels (all passengers sitting); however, for high occupancy lev- els, alternative crowding models estimate similar VTTS. Importantly, if demand for a public transport service is estimated without explicit consideration of crowding as a source of dis- utility for passengers, demand will be overestimated if the service is designed to have a number of standees beyond a threshold, as analytically shown using a MNL choice model. More research is needed to explore if these findings hold with more complex choice models and in other contexts.