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Vertical relationships for the European railway industry

  • Cantos Sánchez, P.

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.

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Article provided by Elsevier in its journal Transport Policy.

Volume (Year): 8 (2001)
Issue (Month): 2 (April)
Pages: 77-83

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Handle: RePEc:eee:trapol:v:8:y:2001:i:2:p:77-83
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  1. Ivaldi, M. & McCullough, G., 1999. "Density and Integration Effects on Class I U.S. Freight Railroads," Papers 99.526, Toulouse - GREMAQ.
  2. DE BORGER, Bruno, 1989. "Estimating a multiple output generalized Box-Cox cost function: Cost structure and productivity growth in Belgian railroad operations, 1950-1986," SESO Working Papers 1989021, University of Antwerp, Faculty of Applied Economics.
  3. Caves, Douglas W & Christensen, Laurits R & Swanson, Joseph A, 1981. "Productivity Growth, Scale Economies, and Capacity Utilization in U.S. Railroads, 1955-74," American Economic Review, American Economic Association, vol. 71(5), pages 994-1002, December.
  4. Pedro Cantos S�nchez, 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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