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Prices, Schedules, and Passenger Welfare in Multi-Service Transportation Systems

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  • Etienne Billette de Villemeur
  • Annalisa Vinella

Abstract

We consider a multi-service transportation system in which passengers are heterogeneous along two dimensions, namely ideal departure time and value of time, leading to both horizontal and vertical differentiation. We investigate the behavior of passengers, and assess how service pricing and scheduling affect their travel choices and welfare. We show that this depends, first, on whether passengers are uninformed or informed about the timetable of services, supplied at different prices, upon arrival at the station. Besides, given the information passengers hold, it also depends on their (individual-specific) value of time. The market segmentation results accordingly, and is found to be finer, in general, when passengers are informed. Our analysis offers policy-makers a scientifically founded tool to make sensible decisions, based on the exact identification of those who would gain and those who would lose from policy changes. The analysis further highlights the potential benefits of information, and points to the importance of facilitating information accessibility to passengers.

Suggested Citation

  • Etienne Billette de Villemeur & Annalisa Vinella, 2019. "Prices, Schedules, and Passenger Welfare in Multi-Service Transportation Systems," CESifo Working Paper Series 7843, CESifo.
    • Handle: RePEc:ces:ceswps:_7843
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    More about this item

    Keywords

    travel demand; service scheduling; market segmentation; targeted policy-making; impact of information;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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