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Optimal pricing in railway passenger transport: theory and practice in The Netherlands

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  • van Vuuren, Daniel

Abstract

This study tries to establish the link between the well-developed economic theory of optimal pricing, and recent empirical results concerning price elasticities of demand and marginal cost estimates for The Netherlands Railways. The ex post determination of Ramsey coefficients confirms that peak hour pricing is dominated by the aim of welfare maximization, while off-peak fares largely correspond to the profit-maximizing objective. It is argued that tariff differentiation according to track offers scope for a budget-neutral welfare improvement, and that a price-elastic off-peak market implies that lower off-peak fares result in a Pareto-improvement.

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  • van Vuuren, Daniel, 2002. "Optimal pricing in railway passenger transport: theory and practice in The Netherlands," Transport Policy, Elsevier, vol. 9(2), pages 95-106, April.
    • Handle: RePEc:eee:trapol:v:9:y:2002:i:2:p:95-106
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    4. Jørgensen, Finn & Pedersen, Hassa & Solvoll, Gisle, 2004. "Ramsey pricing in practice: the case of the Norwegian ferries," Transport Policy, Elsevier, vol. 11(3), pages 205-214, July.
    5. Zhan, Shuguang & Wong, S.C. & Lo, S.M., 2020. "Social equity-based timetabling and ticket pricing for high-speed railways," Transportation Research Part A: Policy and Practice, Elsevier, vol. 137(C), pages 165-186.
    6. Robenek, Tomáš & Azadeh, Shadi Sharif & Maknoon, Yousef & de Lapparent, Matthieu & Bierlaire, Michel, 2018. "Train timetable design under elastic passenger demand," Transportation Research Part B: Methodological, Elsevier, vol. 111(C), pages 19-38.
    7. Jiren CAO & Lei NIE & Lu TONG & Zhenhuan HE & Zhangjiaxuan LIU, 2024. "Dynamic pricing optimization for high-speed railway based on passenger flow assignment," PLOS ONE, Public Library of Science, vol. 19(12), pages 1-25, December.
    8. Carmona, Miguel, 2010. "The regulatory function in public-private partnerships for the provision of transport infrastructure," Research in Transportation Economics, Elsevier, vol. 30(1), pages 110-125.
    9. Jiren, Cao & Zhangjiaxuan, Liu & Zhenhuan, He & Lu, Tong & Lei, Nie, 2025. "Comprehensive optimization of dynamic pricing and passenger flow assignment for differentiated high-speed train products," Transport Policy, Elsevier, vol. 165(C), pages 107-126.
    10. Guillaume Monchambert & Stef Proost, 2019. "How Efficient are Intercity Railway Prices and Frequencies in Europe?: Comparing a Corridor in Belgium and in France," Journal of Transport Economics and Policy, University of Bath, vol. 53(4), pages 323-32-347.
    11. Chunqin Zhang & Yuting Hu & Anning Ni & Hongwei Li, 2019. "Compensation Scheme for Self-Employed Bus Service Requisitions in Urban–Rural Passenger Transport," Sustainability, MDPI, vol. 11(18), pages 1-20, September.
    12. Peer, Stefanie & Knockaert, Jasper & Verhoef, Erik T., 2016. "Train commuters’ scheduling preferences: Evidence from a large-scale peak avoidance experiment," Transportation Research Part B: Methodological, Elsevier, vol. 83(C), pages 314-333.

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