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Improving urban transport performances by tendering lots: an econometric estimation of natural monopoly frontiers

Author

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  • William Roy

    (LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)

  • Yves Croissant

    (LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)

Abstract

Recently, some cities decided to divide their transport network into several attractive and accessible parts (this procedure is called allotment) in order to reduce urban transit costs. Gains obtained by introducing more competition for the market should be compared with costs associated with cutting the network into several parts, and this question is crucially linked with the measure of returns to scale. In this paper, we estimate a translog cost function on a panel of French urban transit networks. Our main conclusion is that scale economies are exhausted for a production corresponding to a city of about 200,000 inhabitants and that allotment, in terms of scale economies, would reduce costs for the seven biggest cities of our sample.

Suggested Citation

  • William Roy & Yves Croissant, 2008. "Improving urban transport performances by tendering lots: an econometric estimation of natural monopoly frontiers," Post-Print halshs-00122887, HAL.
    • Handle: RePEc:hal:journl:halshs-00122887
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00122887v2
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    Cited by:

    1. Iseki, Hiroyuki, 2008. "Economies of scale in bus transit service in the USA: How does cost efficiency vary by agency size and level of contracting?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(8), pages 1086-1097, October.

    More about this item

    Keywords

    urban public transport industry; panel data; natural monopoly; allotment;
    All these keywords.

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