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Operating costs in Norwegian toll companies: A panel data analysis

Author

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  • Gunnar Bårdsen

    (Department of Economics, Norwegian University of Science and Technology, Norway)

  • Erik Amdal

    (Norwegian Public Roads Administration)

  • Kåre Johansen

    (Department of Economics, Norwegian University of Science and Technology, Norway)

  • Morten Welde

    (Norwegian Public Roads Administration)

Abstract

The objective of this paper is to ease the planning of new toll projects by providing estimates of operating costs, and to help us make better informed decisions about the design of the toll collection system. To do so we use panel data for Norwegian toll companies to estimate average cost functions. The main results can be summarised as follows. We provide evidence of very important unexploited economies of scale. The estimates cost curves are very steep for traffic levels below the sample mean, and becomes almost entirely flat over a wide range above the sample mean. A higher share of vehicles using on board units will significantly reduce average costs. Competitive tendering will significantly reduce average operating costs by as much as 25 %. Our results also suggest that increased number of lanes, higher debt and passenger charging will increase average operating costs whereas average operating costs are lower for toll cordons compared with other projects.

Suggested Citation

  • Gunnar Bårdsen & Erik Amdal & Kåre Johansen & Morten Welde, 2006. "Operating costs in Norwegian toll companies: A panel data analysis," Working Paper Series 6906, Department of Economics, Norwegian University of Science and Technology.
    • Handle: RePEc:nst:samfok:6906
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    File URL: http://www.svt.ntnu.no/iso/WP/2006/5TOLLCOST.pdf
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    References listed on IDEAS

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    Cited by:

    1. Welde, Morten & Odeck, James, 2011. "The efficiency of Norwegian road toll companies," Utilities Policy, Elsevier, vol. 19(3), pages 162-171.
    2. Welde, Morten & Bråthen, Svein & Rekdal, Jens & Zhang, Wei, 2020. "Road investments and the trade-off between private and public funding," Research in Transportation Economics, Elsevier, vol. 82(C).
    3. Albalate, Daniel & Rosell, Jordi, 2019. "On the efficiency of toll motorway companies in Spain," Research in Transportation Economics, Elsevier, vol. 76(C).
    4. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2021. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Efficiency Series Papers 2021/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    5. Sarmento, Joaquim Miranda & Renneboog, Luc & Verga-Matos, Pedro, 2017. "Measuring highway efficiency : A DEA approach and the Malquist index," Other publications TiSEM 23264815-321e-45a3-83ee-9, Tilburg University, School of Economics and Management.
    6. Odeck, James, 2019. "Estimating and predicting the operational costs of road tolls: An econometric assessment using panel data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 130(C), pages 466-478.
    7. Eliasson, Jonas, 2009. "A cost-benefit analysis of the Stockholm congestion charging system," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(4), pages 468-480, May.
    8. Odeck, James, 2008. "How efficient and productive are road toll companies?: Evidence from Norway," Transport Policy, Elsevier, vol. 15(4), pages 232-241, July.
    9. Cruz, Carlos Oliveira & Sarmento, Joaquim Miranda, 2018. "The price of project finance loans for highways," Research in Transportation Economics, Elsevier, vol. 70(C), pages 161-172.
    10. Daniel Albalate & Jordi Rosell, 2016. "Persistent and transient efficiency on the stochastic production and cost frontiers – an application to the motorway sector," Working Papers XREAP2016-04, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2016.
    11. Oliveira Cruz, Carlos & Miranda Sarmento, Joaquim, 2017. "Horizontal bundling of infrastructure managers: The case of Portugal Infrastructure Company (roads and railways)," Transport Policy, Elsevier, vol. 55(C), pages 99-103.
    12. Baños-Pino, José F. & Boto-García, David & Zapico, Emma, 2022. "Persistence and dynamics in the efficiency of toll motorways: The Spanish case," Economics of Transportation, Elsevier, vol. 31(C).
    13. Lauridsen, Henning, 2011. "The impacts of road tolling: A review of Norwegian experience," Transport Policy, Elsevier, vol. 18(1), pages 85-91, January.
    14. Julia Numrich & Sascha Ruja & Stefan Voß, 2012. "Global Navigation Satellite System based tolling: state-of-the-art," Netnomics, Springer, vol. 13(2), pages 93-123, July.
    15. Hamilton, Carl J., 2011. "Revisiting the cost of the Stockholm congestion charging system," Transport Policy, Elsevier, vol. 18(6), pages 836-847, November.
    16. Welde, Morten, 2011. "Demand and operating cost forecasting accuracy for toll road projects," Transport Policy, Elsevier, vol. 18(5), pages 765-771, September.

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