Horizontal Differentiation and the survival of Train and Coach modes in medium range passenger transport, a welfare analysis comprising economies of scope and scale
The Portuguese transport system as a whole suffers from the dominance of personal transportation, this being generally less efficient. Coaches and trains struggle to stay in the business. This model explains the markets’ performance beyond price differentials, bundling the transport modes’ appeal in one index for each. The differentiated transport cost approach accounts for product differentiation, economies of scope accruing to the consumer, and allows for economies of scale, in the form of fixed costs, to be weighted in, as well as tax policies towards motoring. It goes further by building a general welfare function that permits all factors and competition regimes to be properly compared. These are a monopoly by cars, duopolies with cars and each of the public transports, and oligopolies with public transports either competing or colluding. Simulations are carried out, and discussed in light of swings in market share and changes in welfare, with a reasonable claim to plausibility. Both public transports make the public better off by staying in the market, although the coaches’ contribution is more decisive. Trains results are weighted down by heavy fixed costs, and the far reaching coach network of destinations offers the second best service (behind that of cars). Collusion in the public transports is a price worth paying, when compared with the car monopoly emerging from bankrupt operators.
|Date of creation:||2005|
|Publication status:||Published in International Journal of Transport Economics 35(1): 101-119, 2008.|
|Contact details of provider:|| Postal: Av. Dias da Silva, 165, 3004-512 COIMBRA|
Phone: + 351 239 790 500
Fax: +351 239 403511
Web page: http://www.uc.pt/en/feuc/gemf/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Addison, John T. & Surfield, Christopher J., 2005.
"‘Atypical Work’ and Compensation,"
IZA Discussion Papers
1477, Institute for the Study of Labor (IZA).
- John T . Addison & Paulino Teixeira, 2001. "Technology, Employment and Wages," LABOUR, CEIS, vol. 15(2), pages 191-219, 06.
- John T. Addison & Thorsten Schank & Claus Schnabel & Joachim Wagner, 2005.
"Works Councils in the Production Process,"
GEMF Working Papers
2005-12, GEMF, Faculty of Economics, University of Coimbra.
- John T. Addison & Thorsten Schank & Claus Schnabel & Joachim Wagner, 2006. "Works Councils in the Production Process," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(2), pages 251-283.
- Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
When requesting a correction, please mention this item's handle: RePEc:gmf:wpaper:2005-15. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ana Seiça)
If references are entirely missing, you can add them using this form.