Customer choice patterns in passenger rail competition
This study explores determinants of customer choice behaviour in passenger rail competition on two cross-border routes, Cologne–Brussels and Cologne–Amsterdam. It fills a gap in the literature on competition in commercial passenger rail by relying on newly collected stated preference data from about 700 on-train interviews. Our multinomial Logit estimations reveal two important effects that are closely connected to (psychological) switching costs. First, the customers on the route Cologne–Amsterdam, for whom competition is a purely hypothetical situation, value a competitive market structure lower than customers on the already competitive route Cologne–Brussels. Second, travellers show a status quo bias with a preference for the service provider on whose trains they were interviewed. This effect goes beyond the impact exercised by explanatory variables capturing the observable differences of the services and customers, including loyalty-enhancing effects like the possession of customer cards. Our results imply that entry into the commercial passenger rail market may be more difficult than often thought. Thus, the study contributes to explaining the low level of competition in these markets in Europe.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 50 (2013)
Issue (Month): C ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Farrell, Joseph & Shapiro, Carl, 1988.
"Dynamic Competition with Switching Costs,"
Department of Economics, Working Paper Series
qt1h02g9q4, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
- Joseph Farrell & Paul Klemperer, 2006.
"Co-ordination and Lock-in: Competition with Switching Costs and Network Effects,"
2006-W07, Economics Group, Nuffield College, University of Oxford.
- Farrell, Joseph & Klemperer, Paul, 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Handbook of Industrial Organization, Elsevier.
- Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," CEPR Discussion Papers 5798, C.E.P.R. Discussion Papers.
- Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Competition Policy Center, Working Paper Series qt9n26k7v1, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Friebel Guido & Niffka Marko, 2009. "The Functioning of Inter-modal Competition in the Transportation Market: Evidence from the Entry of Low-cost Airlines in Germany," Review of Network Economics, De Gruyter, vol. 8(2), pages 1-23, June.
- Chen, Ching-Fu & Chang, Yu-Ying, 2008. "Airline brand equity, brand preference, and purchase intentionsâ€”The moderating effects of switching costs," Journal of Air Transport Management, Elsevier, vol. 14(1), pages 40-42.
- Behrens, Christiaan & Pels, Eric, 2012. "Intermodal competition in the London–Paris passenger market: High-Speed Rail and air transport," Journal of Urban Economics, Elsevier, vol. 71(3), pages 278-288.
- Fredrik Carlsson & Åsa Lofgren, 2006.
"Airline choice, switching costs and frequent flyer programmes,"
Taylor & Francis Journals, vol. 38(13), pages 1469-1475.
- Carlsson, Fredrik & Löfgren, Åsa, 2004. "Airline choice, switching costs and frequent flyer programs," Working Papers in Economics 123, University of Gothenburg, Department of Economics.
- Mark Bradley, 2009. "Important Stated Preference Experimental Design Issues in Recent Transportation Applications," Transport Reviews, Taylor & Francis Journals, vol. 29(5), pages 657-663, March.
- Train,Kenneth E., 2009.
"Discrete Choice Methods with Simulation,"
Cambridge University Press, number 9780521766555, May.
- Paul Klemperer, 1995. "Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," Review of Economic Studies, Oxford University Press, vol. 62(4), pages 515-539.
- RomÃ¡n, ConcepciÃ³n & Espino, Raquel & MartÃn, Juan Carlos, 2007. "Competition of high-speed train with air transport: The case of Madridâ€“Barcelona," Journal of Air Transport Management, Elsevier, vol. 13(5), pages 277-284.
- Samuelson, William & Zeckhauser, Richard, 1988. "Status Quo Bias in Decision Making," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 7-59, March.
- Marc Ivaldi & Catherine Vibes, 2008.
"Price Competition in the Intercity Passenger Transport Market: A Simulation Model,"
Journal of Transport Economics and Policy,
University of Bath, vol. 42(2), pages 225-254, May.
- Ivaldi, Marc & Vibes, Catherine, 2007. "Price Competition in the Intercity Passenger Transport Market : A Simulation Model," IDEI Working Papers 457, Institut d'Économie Industrielle (IDEI), Toulouse.
- Christiane Warnecke & Georg Goetz, 2012. "Offener Marktzugang im europäischen Schienenpersonenverkehr: Erfahrungen aus der Wettbewerbsentwicklung," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 81(1), pages 111-130.
- Tae H. Oum & Waters, W.G. & Jong Say Yong, 1990. "A survey of recent estimates of price elasticities of demand for transport," Policy Research Working Paper Series 359, The World Bank.
- John Preston, 2009. "Competition for Long Distance Passenger Rail Services: The Emerging Evidence," OECD/ITF Joint Transport Research Centre Discussion Papers 2009/23, OECD Publishing.
- P.B. Goodwin, 1977. "Habit and Hysteresis in Mode Choice," Urban Studies, Urban Studies Journal Limited, vol. 14(1), pages 95-98, February.
- Arne Risa Hole, 2007. "Fitting mixed logit models by using maximum simulated likelihood," Stata Journal, StataCorp LP, vol. 7(3), pages 388-401, September.
- Louviere,Jordan J. & Hensher,David A. & ,, 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, May.
- Ivaldi, Marc & Seabright, Paul, 2003. "The Economics of Passenger Rail Transport: A Survey," IDEI Working Papers 163, Institut d'Économie Industrielle (IDEI), Toulouse.
When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:50:y:2013:i:c:p:209-227. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.