The British Passenger Rail Privatisation: Conclusions on Subsidy and Efficiency from the First Round of Franchises

Jonathan Cowie

Journal of Transport Economics and Policy, 2009, vol. 43, issue 1, 85-104

Abstract: The paper examines the issue of subsidy cuts and efficiency gains arising from the first round of franchises from the British passenger rail privatisation. A problem is identified in past studies regarding the lack of a progressive dynamic between subsidy and efficiency over time. This paper assesses efficiency changes and productivity gains achieved by the British train-operating companies over an 8-year period, and then attempts to establish a statistical relationship between efficiency gains and subsidy cuts. Although such a relationship is established, the results more broadly indicate winner's curse syndrome and the strong negotiating position of the incumbent. © 2009 LSE and the University of Bath

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:tpe:jtecpo:v:43:y:2009:i:1:p:85-104

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