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A model of internal and external competition in a High Speed Rail line

Óscar Álvarez-SanJaime, Pedro Cantos-Sánchez (), Rafael Moner-Colonques and José Sempere-Monerris ()
Authors registered in the RePEc Author Service: Óscar Álvarez San-Jaime ()

Economics of Transportation, 2015, vol. 4, issue 3, 178-187

Abstract: This paper is a contribution to evaluate structural and behavioral changes in railway passenger markets. The novel elements of our analysis are the following: (i) the consideration of inter-modal and intra-modal competition, (ii) the presence of public and private operators, and (iii) endogenous service frequency. After calibrating the model using actual data from two Spanish High Speed Rail lines, simulation exercises allow us to conclude the following. Privatization, whether entry occurs or not, would prompt an increase in prices and a reduction in the number of train services, eventually leading to welfare decreases, as compared with a regime where the incumbent rail operator remained public. Entry is found to be welfare improving only when it generates large increases in traffic. Otherwise welfare losses would materialize even though entry raised some efficiency gains.

Keywords: High Speed Rail; Privatization; Entry; Strategic interaction; Welfare (search for similar items in EconPapers)
Date: 2015
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Working Paper: A model of internal and external competition in a high speed rail line (2015)
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DOI: 10.1016/j.ecotra.2015.05.004

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