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Assessing the Marginal Infrastructure Maintenance Wear and Tear Costs for Britain's Railway Network

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  • Phill Wheat
  • Andrew S. J. Smith

Abstract

This paper applies econometric methods to estimate marginal track maintenance cost in Britain - for the first time. The British case is the most radical example of rail reform in the world, and the 2005 Railway Act has resulted in a new and unique regulatory process for determining funding and service levels, where the marginal cost of changing service patterns will be a key input. Cost elasticity and marginal cost estimates are reported and compared against the results of the engineering-based approaches currently used to set variable access charges in Britain, and also against those reported for other countries. The relationship between traffic density and elasticity and marginal cost estimates is explored. The paper also discusses the potential biases introduced into elasticity and marginal cost estimates when dealing with a railway that may be out of steady state, and how to adjust for these. © 2008 LSE and the University of Bath

Suggested Citation

  • Phill Wheat & Andrew S. J. Smith, 2008. "Assessing the Marginal Infrastructure Maintenance Wear and Tear Costs for Britain's Railway Network," Journal of Transport Economics and Policy, University of Bath, vol. 42(2), pages 189-224, May.
  • Handle: RePEc:tpe:jtecpo:v:42:y:2008:i:2:p:189-224
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    Citations

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    Cited by:

    1. Bugarinovic, Mirjana & Boskovic, Branislav, 2015. "A systems approach to access charges in unbundling railways," European Journal of Operational Research, Elsevier, vol. 240(3), pages 848-860.
    2. Smith, Andrew S.J., 2012. "The application of stochastic frontier panel models in economic regulation: Experience from the European rail sector," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(2), pages 503-515.
    3. Odolinski , Kristofer & Nilsson , Jan-Eric, 2016. "Estimating the marginal maintenance cost of rail infrastructure usage in Sweden: does more data make a difference?," Working papers in Transport Economics 2016:27, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    4. Andersson, Mats & Björklund, Gunilla, 2012. "Marginal railway track renewal costs: a survival data approach," Working papers in Transport Economics 2012:29, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    5. Heike Link & Dominika Kalinowska & Uwe Kunert & Sabine Radke, 2009. "Wegekosten und Wegekostendeckung des Straßen- und Schienenverkehrs in Deutschland 2007: Endbericht; Forschungsprojekt im Auftrag des BGL, ADAC und BDI," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 53, number pbk53, December.
    6. Andersson, Mats & Björklund, Gunilla & Haraldsson, Mattias, 2016. "Marginal railway track renewal costs: A survival data approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 87(C), pages 68-77.
    7. repec:exl:1trans:v:12:y:2017:i:1:p:139-150 is not listed on IDEAS
    8. Marc Gaudry & Emile Quinet, 2009. "Track wear-and-tear cost by traffic class: Functional form, zero output levels and marginal cost pricing recovery on the French rail network," Working Papers halshs-00574977, HAL.
    9. Chris Nash, 2011. "Competition and Regulation in Rail Transport," Chapters,in: A Handbook of Transport Economics, chapter 33 Edward Elgar Publishing.
    10. Álvarez-SanJaime, Óscar & Cantos-Sanchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, Jose J., 2016. "Rail access charges and internal competition in high speed trains," Transport Policy, Elsevier, vol. 49(C), pages 184-195.
    11. repec:eee:ecotra:v:10:y:2017:i:c:p:8-17 is not listed on IDEAS
    12. Gillies-Smith, Andrew & Wheat, Phill, 2016. "Do network industries plan to eliminate inefficiencies in response to regulatory pressure? The case of railways in Great Britain," Utilities Policy, Elsevier, vol. 43(PB), pages 165-173.
    13. Sánchez-Borràs, Marta & Nash, Chris & Abrantes, Pedro & López-Pita, Andrés, 2010. "Rail access charges and the competitiveness of high speed trains," Transport Policy, Elsevier, vol. 17(2), pages 102-109, March.
    14. repec:eee:trapol:v:59:y:2017:i:c:p:46-53 is not listed on IDEAS
    15. Andersson, Mats & Smith, Andrew & Wikberg, Åsa & Wheat, Phill, 2012. "Estimating the marginal cost of railway track renewals using corner solution models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 954-964.
    16. Odolinski, Kristofer, 2016. "The impact of axle loads on rail infrastructure maintenance costs," Working papers in Transport Economics 2016:21, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    17. repec:eee:transb:v:107:y:2018:i:c:p:167-191 is not listed on IDEAS

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