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Economies of Scale and Scope in Local Public Transportation

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Author Info
Mehdi Farsi
Aurelio Fetz
Massimo Filippini

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Abstract

This paper analyses the cost structure of the Swiss urban public transport sector in order to assess scale and scope economies. A multi-output cost function has been estimated for a panel data set of companies operating trolley-bus, motor-bus and tramway systems. The results suggest increasing returns to scale and economies of scope. This analysis has important policy implications in view of the ongoing reforms in several European countries in which competitive tendering is occasionally used to assign the provision of transport services to unbundled franchised monopolies. The significant scope economies provide some evidence in favour of integrated multi-mode operation as opposed to unbundling. © 2007 LSE and the University of Bath

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Publisher Info
Article provided by London School of Economics and University of Bath in its journal Journal of Transport Economics and Policy.

Volume (Year): 41 (2007)
Issue (Month): 3 (September)
Pages: 345-361
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Handle: RePEc:tpe:jtecpo:v:41:y:2007:i:3:p:345-361

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Web page: http://www.bath.ac.uk/e-journals/jtep

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  1. Matthias Walter & Astrid Cullmann, 2008. "Potential Gains from Mergers in Local Public Transport : An Efficiency Analysis Applied to Germany," Discussion Papers of DIW Berlin 832, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  2. Ottoz Elisabetta & Di Giacomo Marina, 2008. "Diversification strategies and scope economies evidence from a sample of Italian bus transport providers," Department of Economics Working Papers 200802, University of Turin. [Downloadable!]
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