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Welfare Effects of Price Integration in Local Public Transport


  • Alberto Cassone
  • Carla Marchese


In metropolitan areas collective transport is often supplied by many firms and in many modes. The paper focusses on the merging of decisions about prices in two market regimes: monopoly and benevolent regulation through Ramsey pricing. The results confirm that centralization entails efficiency gains under monopoly whenever a unique supplier substitutes many firms serving each link of a network. Under benevolent regulation, instead, centralization entails efficiency gains only under certain conditions. Moreover, efficiency improvements under Ramsey pricing involve the introduction of cross subsidies among previous regulatory jurisdictions. Hence some users gain while others lose. Both the theoretical and empirical literature suggest that periphery residents are the main beneficiaries of centralization. Copyright CIRIEC, 2005.

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  • Alberto Cassone & Carla Marchese, 2005. "Welfare Effects of Price Integration in Local Public Transport," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 76(2), pages 257-274, June.
  • Handle: RePEc:bla:annpce:v:76:y:2005:i:2:p:257-274

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    References listed on IDEAS

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    Cited by:

    1. Abrate, Graziano & Piacenza, Massimiliano & Vannoni, Davide, 2009. "The impact of Integrated Tariff Systems on public transport demand: Evidence from Italy," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 120-127, March.
    2. repec:eee:retrec:v:66:y:2017:i:c:p:26-35 is not listed on IDEAS

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