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Vertical relationships for the European railway industry

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  • Cantos Sánchez, P.

Abstract

A key question in the reform process of Europe's railway industry is the decision whether to opt for a market structure that vertically integrates infrastructure and operations, or for one that separates them. In making this decision, knowledge of the relationship between operating costs and the infrastructure is fundamental. For this purpose a translogarithmic cost function is estimated, including the multi-product nature of railway companies and a measurement of the value of the infrastructure. The results show that costs deriving from freight transport and from the infrastructure are complementary, while those deriving from passenger transport and from the infrastructure are substitutes. In any case, the paper shows that if important decisions regarding infrastructure are going to be made, rail operating costs will be notably affected, and these effects must be appropriately evaluated.

Suggested Citation

  • Cantos Sánchez, P., 2001. "Vertical relationships for the European railway industry," Transport Policy, Elsevier, vol. 8(2), pages 77-83, April.
    • Handle: RePEc:eee:trapol:v:8:y:2001:i:2:p:77-83
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    References listed on IDEAS

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    1. Ivaldi, M & McCullough, G J, 2001. "Density and Integration Effects on Class I U.S. Freight Railroads," Journal of Regulatory Economics, Springer, vol. 19(2), pages 161-182, March.
    2. Pedro Cantos Sánchez, 2000. "A subadditivity test for the cost function of the principal European railways," Transport Reviews, Taylor & Francis Journals, vol. 20(3), pages 275-290, January.
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    1. Major, Iván, 2004. "A korlátozó szabályozástól az ösztönző szabályozásig. A közlekedés szabályozása az Európai Unióban és Magyarországon [From restricting regulation to incentive regulation. Transport regulation in th," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 501-529.
    2. Thomas Ehrmann & Karl-Hans Hartwig & Torsten Marner & Hendrik Schmale, 2009. "Specific Investments and Ownership Structures in Railways – An Experimental Analysis," Working Papers 12, Institute of Transport Economics, University of Muenster.
    3. Mette Asmild & Torben Holvad & Jens Hougaard & Dorte Kronborg, 2009. "Railway reforms: do they influence operating efficiency?," Transportation, Springer, vol. 36(5), pages 617-638, September.
    4. Slack, Brian & Vogt, Alexander, 2007. "Challenges confronting new traction providers of rail freight in Germany," Transport Policy, Elsevier, vol. 14(5), pages 399-409, September.
    5. Nash, Chris, 2008. "Passenger railway reform in the last 20 years - European experience reconsidered," Research in Transportation Economics, Elsevier, vol. 22(1), pages 61-70, January.
    6. Wetzel, Heike & Growitsch, Christian, 2006. "Economies of Scope in European Railways: An Efficiency Analysis," IWH Discussion Papers 5/2006, Halle Institute for Economic Research (IWH).
    7. Julien Lévêque, 2007. "Allotissement et rendements d'échelle : application aux réseaux de transport ferroviaire," Post-Print halshs-00280396, HAL.
    8. Mizutani, Fumitoshi & Shoji, Kenichi, 2004. "Rail operation-infrastructure separation: the case of Kobe rapid transit railway," Transport Policy, Elsevier, vol. 11(3), pages 251-263, July.
    9. Miguel Urdánoz & Catherine Vibes, 2013. "Regulation and cost efficiency in the European railways industry," Journal of Productivity Analysis, Springer, vol. 39(3), pages 217-230, June.

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