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Regulatory reform and the congestion of urban railways

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  • Kidokoro, Yukihiro

Abstract

This paper examines various regulatory methods for congested urban railways. After building a closed spatial model with a congestible railway line, we conduct a numerical simulation of the impacts of the regulatory methods, using data on a typical railway firm in Japan. A closed spatial model in this paper enables us to evaluate the regulatory methods in terms of social welfare as well as to show a change in the typical performance of railways, such as the level of fares, railway capacity, and congestion. The simulation results show that implementing simple price-cap regulation, without properly addressing the congestion problem, makes railway firms operate efficiently, but substantially shrinks railway capacity and lowers social welfare. We then consider modified versions of price-cap regulation, which are consistent with relief of congestion.

Suggested Citation

  • Kidokoro, Yukihiro, 2006. "Regulatory reform and the congestion of urban railways," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(1), pages 52-73, January.
    • Handle: RePEc:eee:transa:v:40:y:2006:i:1:p:52-73
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    1. repec:dpr:wpaper:0449 is not listed on IDEAS
    2. Braeutigam, Ronald R & Panzar, John C, 1993. "Effects of the Change from Rate-of-Return to Price-Cap Regulation," American Economic Review, American Economic Association, vol. 83(2), pages 191-198, May.
    3. Yukihiro Kidokoro, 2004. "Cost-Benefit Analysis for Transport Networks: Theory and Application," Journal of Transport Economics and Policy, University of Bath, vol. 38(2), pages 275-307, May.
    4. Kanemoto, Yoshitsugu, 1980. "Theories of urban externalities," MPRA Paper 24614, University Library of Munich, Germany.
    5. Kanemoto, Yoshitsugu & Kiyono, Kazuharu, 1995. "Regulation of commuter railways and spatial development," Regional Science and Urban Economics, Elsevier, vol. 25(4), pages 377-394, August.
    6. Kidokoro, Yukihiro, 1998. "Rate of return regulation and rate base valuation," Regional Science and Urban Economics, Elsevier, vol. 28(5), pages 629-654, September.
    7. Ian W. H. Parry & Kenneth A. Small, 2005. "Does Britain or the United States Have the Right Gasoline Tax?," American Economic Review, American Economic Association, vol. 95(4), pages 1276-1289, September.
    8. Liston, Catherine, 1993. "Price-Cap versus Rate-of-Return Regulation," Journal of Regulatory Economics, Springer, vol. 5(1), pages 25-48, March.
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    1. Junya Kumagai & Mihoko Wakamatsu & Shunsuke Managi, 2021. "Do commuters adapt to in-vehicle crowding on trains?," Transportation, Springer, vol. 48(5), pages 2357-2399, October.
    2. Kidokoro, Yukihiro, 2002. "The Effects of Regulatory Reform on Quality," Journal of the Japanese and International Economies, Elsevier, vol. 16(1), pages 135-146, March.

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