 Reducing urban public transport costs by tendering lots: a panel data estimationYves Croissant, William Roy and Joan Canton () Applied Economics, 2013, vol. 45, issue 26, 3711-3722 Abstract: Allotment is, for urban authorities, a governance strategy to reduce public transport costs. It consists of dividing a network into several lots, so as to multiply the number of calls for tender. On the one hand, gains should be obtained by increasing competition for the market and reducing the costs of obtaining accurate information. On the other hand, cutting a network into several parts is also expected to have negative consequences on production costs, in terms of lower returns to scale. Many industry stakeholders believe that the latter element more than compensates for the former. In this article, we estimate a translog cost function with a panel of 141 French urban public transport networks. Our main conclusion is that scale economies are exhausted for a production of about 3 million vehicle-kilometres per year. Therefore, as far as returns to scale are concerned, allotment would reduce the costs of public transport services for the main cities of our sample. A second dividend for allotment is then presented and implies that the assumed trade-off between returns to scale and increased competition is irrelevant. Date: 2013 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:45:y:2013:i:26:p:3711-3722 Ordering information: This journal article can be ordered from DOI: 10.1080/00036846.2012.730133 Access Statistics for this article Applied Economics is currently edited by Anita Phillips More articles in Applied Economics from Taylor & Francis Journals |
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