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The British Passenger Rail Privatisation: Conclusions on Subsidy and Efficiency from the First Round of Franchises

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  • Jonathan Cowie

Abstract

The paper examines the issue of subsidy cuts and efficiency gains arising from the first round of franchises from the British passenger rail privatisation. A problem is identified in past studies regarding the lack of a progressive dynamic between subsidy and efficiency over time. This paper assesses efficiency changes and productivity gains achieved by the British train-operating companies over an 8-year period, and then attempts to establish a statistical relationship between efficiency gains and subsidy cuts. Although such a relationship is established, the results more broadly indicate winner's curse syndrome and the strong negotiating position of the incumbent. © 2009 LSE and the University of Bath

Suggested Citation

  • Jonathan Cowie, 2009. "The British Passenger Rail Privatisation: Conclusions on Subsidy and Efficiency from the First Round of Franchises," Journal of Transport Economics and Policy, University of Bath, vol. 43(1), pages 85-104, January.
    • Handle: RePEc:tpe:jtecpo:v:43:y:2009:i:1:p:85-104
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    Cited by:

    1. Preston, John & Robins, Dawn, 2013. "Evaluating the long term impacts of transport policy: The case of passenger rail privatisation," Research in Transportation Economics, Elsevier, vol. 39(1), pages 14-20.
    2. Canca, David & De-Los-Santos, Alicia & Laporte, Gilbert & Mesa, Juan A., 2019. "Integrated Railway Rapid Transit Network Design and Line Planning problem with maximum profit," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 127(C), pages 1-30.
    3. Preston, John & Bickel, Charles, 2020. "And the beat goes on. The continued trials and tribulations of passenger rail franchising in Great Britain," Research in Transportation Economics, Elsevier, vol. 83(C).
    4. Preston, John, 2018. "The wheels keep on turning: Is the end of rail franchising in Britain in sight?," Research in Transportation Economics, Elsevier, vol. 69(C), pages 187-196.
    5. Smith, Andrew S.J. & Wheat, Phill E. & Nash, Chris A., 2010. "Exploring the effects of passenger rail franchising in Britain: Evidence from the first two rounds of franchising (1997-2008)," Research in Transportation Economics, Elsevier, vol. 29(1), pages 72-79.
    6. Jonathan Cowie & Sarah Loynes, 2012. "An assessment of cost management regimes in British rail infrastructure provision," Transportation, Springer, vol. 39(6), pages 1281-1299, November.
    7. repec:hal:journl:dumas-00793119 is not listed on IDEAS
    8. Álvaro Costa & Carlos Oliveira Cruz & Joaquim Miranda Sarmento & Vitor Faria Sousa, 2021. "Empirical Analysis of the Effects of Ownership Model (Public vs. Private) on the Efficiency of Urban Rail Firms," Sustainability, MDPI, vol. 13(23), pages 1-14, December.
    9. Wheat, Phill & Smith, Andrew S.J. & Rasmussen, Torris, 2018. "Can competition for and in the market co-exist in terms of delivering cost efficient services? Evidence from open access train operators and their franchised counterparts in Britain," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 114-124.
    10. Tolga Ülkü & Vahidin Jeleskovic & Jürgen Müller, 2014. "How scale and institutional setting explain the costs of small airports? -An application of spatial regression analysis," MAGKS Papers on Economics 201435, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    11. Richard D Knowles, 2013. "Railway Franchising in Great Britain and Effects of the 2008/09 Economic Recession," Environment and Planning A, , vol. 45(1), pages 197-216, January.
    12. Fenling Feng & Tianzuo Zhang & Chengguang Liu & Lifeng Fan, 2020. "China Railway Express Subsidy Model Based on Game Theory under “the Belt and Road” Initiative," Sustainability, MDPI, vol. 12(5), pages 1-16, March.

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