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A model of internal and external competition in a High Speed Rail line

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  • Álvarez-SanJaime, Óscar
  • Cantos-Sanchez, Pedro
  • Moner-Colonques, Rafael
  • Sempere-Monerris, Jose J.

Abstract

This paper is a contribution to evaluate structural and behavioral changes in railway passenger markets. The novel elements of our analysis are the following: (i) the consideration of inter-modal and intra-modal competition, (ii) the presence of public and private operators, and (iii) endogenous service frequency. After calibrating the model using actual data from two Spanish High Speed Rail lines, simulation exercises allow us to conclude the following. Privatization, whether entry occurs or not, would prompt an increase in prices and a reduction in the number of train services, eventually leading to welfare decreases, as compared with a regime where the incumbent rail operator remained public. Entry is found to be welfare improving only when it generates large increases in traffic. Otherwise welfare losses would materialize even though entry raised some efficiency gains.

Suggested Citation

  • Álvarez-SanJaime, Óscar & Cantos-Sanchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, Jose J., 2015. "A model of internal and external competition in a High Speed Rail line," Economics of Transportation, Elsevier, vol. 4(3), pages 178-187.
  • Handle: RePEc:eee:ecotra:v:4:y:2015:i:3:p:178-187
    DOI: 10.1016/j.ecotra.2015.05.004
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    References listed on IDEAS

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    Cited by:

    1. Gaggero, Alberto A. & Ogrzewalla, Lukas & Bubalo, Branko, 2019. "Pricing of the long-distance bus service in Europe: The case of Flixbus," Economics of Transportation, Elsevier, vol. 19(C), pages 1-1.
    2. Cherbonnier, Frédéric & Ivaldi, Marc & Muller-Vibes, Catherine & Van Der Straeten, Karine, 2018. "Competition For Versus In the Market of Long-Distance Passenger Rail Services," TSE Working Papers 18-901, Toulouse School of Economics (TSE), revised Apr 2018.
    3. Wan, Yulai & Ha, Hun-Koo & Yoshida, Yuichiro & Zhang, Anming, 2016. "Airlines’ reaction to high-speed rail entries: Empirical study of the Northeast Asian market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 532-557.
    4. Álvarez-SanJaime, Óscar & Cantos-Sanchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, Jose J., 2016. "Rail access charges and internal competition in high speed trains," Transport Policy, Elsevier, vol. 49(C), pages 184-195.
    5. Chai, Jian & Zhou, Youhong & Zhou, Xiaoyang & Wang, Shouyang & Zhang, Zhe George & Liu, Zenghui, 2018. "Analysis on shock effect of China’s high-speed railway on aviation transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 108(C), pages 35-44.
    6. Li, Xue-yan & Li, Xue-mei & Li, Xue-wei & Qiu, He-ting, 2017. "Multi-agent fare optimization model of two modes problem and its analysis based on edge of chaos," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 469(C), pages 405-419.
    7. Daniel Albalate & Mattia Borsati, 2019. "“On the modal shift from motorway to high-speed rail: evidence from Italy”," IREA Working Papers 201910, University of Barcelona, Research Institute of Applied Economics, revised Jun 2019.

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