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Effect of the Introduction of High-speed Trains on Consumer Welfare

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  • Baek, Ji Sun

Abstract

This paper examines the impact of introducing high-speed trains on consumer welfare, taking the ensuing changes in train schedules into account. Based on the estimated demand model for travel which incorporates consumer's heterogeneous preferences for travel schedules into the standard discrete-choice model, I separately evaluate the impact from adding high-speed trains and that from changes in train schedules. The results indicate that consumers who travel between two cities connected by high-speed trains benefit from the introduction of high-speed trains, while some travelers whose choice set does not include high-speed trains face a reduced frequency of non-high-speed trains, resulting in significant losses.

Suggested Citation

  • Baek, Ji Sun, 2016. "Effect of the Introduction of High-speed Trains on Consumer Welfare," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 38(1), pages 23-52.
    • Handle: RePEc:zbw:kdijep:v:38:y:2016:i:1:p:23-52
    DOI: 10.23895/kdijep.2016.38.1.23
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    References listed on IDEAS

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    More about this item

    Keywords

    Endogenous product characteristics; New product entry; Consumer surplus; Highspeed train; Korea; KTX;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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