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Hedonic pricing models for metropolitan bus services

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Author Info

  • Terence tai-leung Chong

    ()
    (Department of Economics, The Chinese University of Hong Kong)

  • Angela Fung

    ()
    (Department of Finance, The Chinese University of Hong Kong)

  • Wing-ting Lee

    ()
    (Department of Finance, The Chinese University of Hong Kong)

  • Ka-lai Man

    ()
    (Department of Finance, The Chinese University of Hong Kong)

Abstract

Conventional studies on the pricing of bus services use the cost structure to explain bus fares. In this paper, a hedonic pricing model for bus services in Hong Kong is estimated. The contributions of cost and market factors are uncovered. It is found that the cost factors dominate the determination of bus fares. In contrast to our expectation, bus fares do not react to competition faced by bus companies. Moreover, except the three cross-harbour tunnels, the bus fare has no direct relationship with the tolls of other tunnels. Our model serves well as a reference tool for bus companies to set market-acceptable bus fares.

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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 29 (2009)
Issue (Month): 2 ()
Pages: 630-637

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Handle: RePEc:ebl:ecbull:eb-09-00143

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Related research

Keywords: Hedonic Pricing Model; Bus Fares; Kowloon Motor Bus.;

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  1. Freeman, A Myrick, III, 1979. " Hedonic Prices, Property Values and Measuring Environmental Benefits: A Survey of the Issues," Scandinavian Journal of Economics, Wiley Blackwell, vol. 81(2), pages 154-73.
  2. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
  3. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  4. Steven C. Bourassa & Vincent S. Peng, 1999. "Hedonic Prices and House Numbers: The Influence of Feng Shui," International Real Estate Review, Asian Real Estate Society, vol. 2(1), pages 79-93.
  5. TerenceTai-Leung Chong & Xin Du , 2008. "Hedonic Pricing Models For Vehicle Registration Marks," Pacific Economic Review, Wiley Blackwell, vol. 13(2), pages 259-276, 05.
  6. Judy Shaw-Er & Wang Chiang & Ya-Wen Chen, 2005. "Cost structure and technological change of local public transport: the Kaohsiung City Bus case," Applied Economics, Taylor & Francis Journals, vol. 37(12), pages 1399-1410.
  7. Tabuchi Takatoshi, 1993. "Bottleneck Congestion and Modal Split," Journal of Urban Economics, Elsevier, vol. 34(3), pages 414-431, November.
  8. Joyce M. Dargay & Mark Hanly, 2002. "The Demand for Local Bus Services in England," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 36(1), pages 73-91, January.
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