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Analysis of intercity bus markets on long distances in an established and a young market: The example of the U.S. and Germany

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  • Augustin, Katrin
  • Gerike, Regine
  • Martinez Sanchez, Manuel Josue
  • Ayala, Carolina

Abstract

Recent deregulation in German long distance bus services lead to highly dynamic developments in this market. Long-distance coach services in the U.S. have been deregulated since the 1980th. The aim of this paper is to compare one established and one young/emerging market with the example of the U.S. and Germany. We first investigate how the framework conditions and market structures have developed in both countries. Based on a unique dataset with more than 2000 US and more than 150 German routes including various variables on long-distance coach services, we analyse in a second step the supply and ticket prices in both markets that results from the different regulative settings. The results show that distance, the number of stops and frequency are highly significant determinants explaining the size of ticket price. Regarding competitive behaviour, we identify operators determining significant lower ticket prices in the markets compared to others. Finally, we consider how the spatial structure in the US influences the supply. We find that spatial distribution of the cities as well as demographic attributes such as the size population and the share of white population are determining the supply of intercity bus services in the US.

Suggested Citation

  • Augustin, Katrin & Gerike, Regine & Martinez Sanchez, Manuel Josue & Ayala, Carolina, 2014. "Analysis of intercity bus markets on long distances in an established and a young market: The example of the U.S. and Germany," Research in Transportation Economics, Elsevier, vol. 48(C), pages 245-254.
    • Handle: RePEc:eee:retrec:v:48:y:2014:i:c:p:245-254
    DOI: 10.1016/j.retrec.2014.09.047
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    References listed on IDEAS

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    1. Martin Schiefelbusch, 2013. "Past and Future Regulation of Interurban Coach Services in Germany," Journal of Transport Economics and Policy, University of Bath, vol. 47(2), pages 299-305, May.
    2. Sue Jaffer & David Thompson, 1986. "Deregulating express coaches: a reassessment," Fiscal Studies, Institute for Fiscal Studies, vol. 7(4), pages 45-68, November.
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    Citations

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    Cited by:

    1. Ida, Yoram & Talit, Gal, 2015. "Regulation of public bus services: The Israeli experience," Transport Policy, Elsevier, vol. 42(C), pages 156-165.
    2. Brand, Christina & Sieg, Gernot, 2020. "The impact of delays on the welfare effects of on-track competition: The case of transfer passengers with operator-tied tickets," Research in Transportation Economics, Elsevier, vol. 80(C).
    3. Konrad Steiner & Stefan Irnich, 2018. "Schedule-Based Integrated Intercity Bus Line Planning via Branch-and-Cut," Transportation Science, INFORMS, vol. 52(4), pages 882-897, August.
    4. Samuel de Haas & Daniel Herold & Jan Thomas Schaefer, 2017. "Entry deterrence due to brand proliferation: Empirical evidence from the German interurban bus industry," MAGKS Papers on Economics 201731, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Beria, Paolo & Debernardi, Andrea & Ferrara, Emanuele, 2017. "Measuring the long-distance accessibility of Italian cities," Journal of Transport Geography, Elsevier, vol. 62(C), pages 66-79.
    6. Kilani, Moez & de Palma, André & Proost, Stef, 2017. "Are users better-off with new transit lines?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 95-105.
    7. Taylor, Zbigniew & Ciechański, Ariel, 2018. "Systemic transformation and changes in surface transport companies in Poland: A synthesis after twenty-five years," Journal of Transport Geography, Elsevier, vol. 70(C), pages 114-122.
    8. Burgdorf, Christian & Eisenkopf, Alexander, 2018. "Effects of road tolls for intercity buses on travel activities and the choice of means of transport in German long-distance passenger transport," Research in Transportation Economics, Elsevier, vol. 72(C), pages 92-105.
    9. Aarhaug, Jørgen & Fearnley, Nils, 2016. "Deregulation of the Norwegian long distance express coach market," Transport Policy, Elsevier, vol. 46(C), pages 1-6.
    10. Konrad Steiner & Stefan Irnich, 2016. "Schedule-based integrated inter-city bus line planning via branch-and-cut," Working Papers 1608, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    11. 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.
    12. Beria, Paolo & Bertolin, Alberto, 2019. "Evolving long-distance passenger services. Market concentration, fares and specialisation patterns in Italy," Research in Transportation Economics, Elsevier, vol. 74(C), pages 77-92.
    13. Moshe Givoni, 2020. "The high‐speed bus (HSB) as an alternative to the high‐speed rail (HSR): A conceptual approach examined through a case study," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 507-518, June.
    14. Aarhaug, Jørgen & Farstad, Eivind & Fearnley, Nils & Halse, Askill Harkjerr, 2018. "Express coaches: An up-hill battle after liberalization?," Research in Transportation Economics, Elsevier, vol. 72(C), pages 82-91.
    15. de Haas, Samuel & Herold, Daniel & Schäfer, Jan Thomas, 2022. "Entry deterrence due to brand proliferation: Empirical evidence from the German interurban bus industry," International Journal of Industrial Organization, Elsevier, vol. 83(C).
    16. Ryerson, Megan S. & Kim, Amy M., 2018. "A drive for better air service: How air service imbalances across neighboring regions integrate air and highway demands," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 237-255.
    17. Thomai TASOPOULOU & Dimitrios TSIOTAS & Serafeim POLYZOS, 2023. "Investigating The Interaction Between The Topology Of Bus Transport Networks And Regional Development In Greece," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 25-46, June.
    18. Fageda, Xavier & Sansano, Sergi, 2018. "Factors influencing prices and frequencies in the interurban bus market: Evidence from Europe," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 266-276.
    19. Joseph P. Schwieterman & Nicholas J. Klein & Alexander Levin, 2019. "Direct to your destination: the size, scope and competitive status of express coach carriers in the United States," Transportation, Springer, vol. 46(4), pages 1487-1504, August.
    20. Ali Solak, 2016. "Regulations in Scheduled Intercity Coach Transport Sector in Turkey," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(8), pages 1-33, August.
    21. Beria, Paolo & Nistri, Dario & Laurino, Antonio, 2018. "Intercity coach liberalisation in Italy: Fares determinants in an evolving market," Research in Transportation Economics, Elsevier, vol. 69(C), pages 260-269.

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    More about this item

    Keywords

    Intercity bus; Deregulation; USA; Germany; Competition; OLS regression; Spatial regression; C51; L13; L51; L98; R12;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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