Performance, profit and consumer sovereignty in the English deregulated bus market

Jonathan Cowie

Research in Transportation Economics, 2014, vol. 48, issue C, 255-262

Abstract: The pure free market will theoretically result in economic efficiency being achieved. At the heart of this proposition is the idea of consumer sovereignty, where producers that best meet the material wants of consumers will be the most successful. With some notable exceptions however, few transport markets work along free market principles, and hence by implication with little consumer sovereignty. Deregulated bus markets however, ‘should’ show evidence of the theorem. This paper therefore examines the English deregulated market to examine if this is indeed the case. An overall assessment of performance in terms of fare levels, technical efficiencies, profitability and user satisfaction is undertaken, and a correlation matrix estimated from which some overall patterns become clear. This is further developed through a more formal cluster analysis, out of which emerges a clear five cluster model. Clusters identify operators as classic oligopolists, efficient profiteers, mature market operators, the consumers' choice and the low fare operator. The overriding conclusion is that whilst there is some evidence of consumer sovereignty, the vast majority of local English bus markets contain producer centric operators that remain protected by significant barriers to entry. As a consequence, the market cannot regulate its own behaviour to produce economically efficient bus services.

Keywords: Deregulation; Consumer sovereignty; Bus markets; Cluster analysis; Efficiency analysis (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0739885914000900
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:retrec:v:48:y:2014:i:c:p:255-262

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_2&version=01

DOI: 10.1016/j.retrec.2014.09.049

Access Statistics for this article

Research in Transportation Economics is currently edited by M. Dresner

More articles in Research in Transportation Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().