Nash, CA, Smith, ASJ, van de Velde, D et al. (2 more authors) (2014) Structural reforms in the railways: Incentive misalignment and cost implications. Research in Transportation Economics, 48. 16 - 23. ISSN 1875-7979
Abstract
In Europe, many countries have completely separated their railways into totally separate infrastructure managers and railway undertakings (train operators) and the European Commission has sought to make such complete vertical separation a legal requirement. This study used both quantitative and qualitative methods to investigate the impact on costs of vertical separation. We find the impact to vary with circumstances, but for more densely used railways and those with a higher proportion of freight traffic, vertical separation raises costs. It appears that the main reason for this is the misalignment of incentives, leading each player to seek to optimise their own costs rather than those of the system as a whole. Various approaches are used to try to overcome this misalignment, through track access charges, performance regimes and various forms of partnership, but none is fully successful. We also find no evidence that complete vertical separation leads to more competition, or indeed that such an increase in competition reduces costs, though we consider that further work is needed to better measure the extent of competition in different markets. From a policy perspective our findings suggest that alternative railway structures will suit different railways with different patterns of usage and therefore a policy that seeks to impose complete vertical separation on all EU members would increase costs
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2014 Elsevier Ltd. All rights reserved. NOTICE: this is the author’s version of a work that was accepted for publication in Research in Transportation Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Research in Transportation Economics, 48, (2014) DOI 10.1016/j.retrec.2014.09.027 |
Keywords: | Structure; railways; incentives; cost; transactions |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Environment (Leeds) > Institute for Transport Studies (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 18 Feb 2015 15:24 |
Last Modified: | 20 Jan 2018 17:34 |
Published Version: | http://dx.doi.org/10.1016/j.retrec.2014.09.027 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.retrec.2014.09.027 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:82988 |