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Dynamics in rail infrastructure provision: maintenance and renewal costs in Sweden

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In this paper, we extend to the literature on marginal wear and tear cost estimation in railways, by applying a panel vector autoregressive model to rail infrastructure renewals and maintenance costs, using an extensive dataset from Sweden. This study is significant given the inherent difficulties in modelling the substantial renewals element of infrastructure costs, as well as the need to account for the dynamics in renewals and maintenance. The dynamic model allows us to estimate equilibrium cost elasticities with respect to train usage, which are significantly larger than their static counterparts. Overall, this work highlights that dynamics in rail infrastructure costs are important to consider when setting track access charges with respect to the wear and tear caused by traffic. This is particularly important given several countries, for example France, Sweden and Switzerland, are now setting access charges at marginal costs based on econometric studies.

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  • Odolinski, Kristofer & Wheat, Phillip, 2016. "Dynamics in rail infrastructure provision: maintenance and renewal costs in Sweden," Working papers in Transport Economics 2016:23, CTS - Centre for Transport Studies Stockholm (KTH and VTI), revised 11 Dec 2017.
    • Handle: RePEc:hhs:ctswps:2016_023
    DOI: 10.1016/j.ecotra.2018.01.001
    Note: Published in Economics of Transportation, Volume 14, June 2018, Pages 21-30.
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    Cited by:

    1. Odolinski, Kristofer & Boysen, Hans E., 2018. "Railway line capacity utilisation and its impact on maintenance costs," Working papers in Transport Economics 2018:10, CTS - Centre for Transport Studies Stockholm (KTH and VTI), revised 30 Oct 2018.
    2. Nilsson, Jan-Eric & Odolinski, Kristofer, 2020. "When should infrastructure assets be renewed?: the economic impact of cumulative tonnes on railway infrastructure," Papers 2020:4, Research Programme in Transport Economics.
    3. Szabolcs Duleba & Bálint Farkas, 2019. "Principal Component Analysis of the Potential for Increased Rail Competitiveness in East-Central Europe," Sustainability, MDPI, vol. 11(15), pages 1-19, August.

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    More about this item

    Keywords

    Rail infrastructure; Renewal; Maintenance; Panel vector autoregression; Marginal cost; Impulse response analysis;
    All these keywords.

    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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