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Hedonic pricing models for metropolitan bus services

Author

Listed:
  • Terence tai-leung Chong

    (Department of Economics, The Chinese University of Hong Kong)

  • Angela Fung

    (Department of Finance, The Chinese University of Hong Kong)

  • Wing-ting Lee

    (Department of Finance, The Chinese University of Hong Kong)

  • Ka-lai Man

    (Department of Finance, The Chinese University of Hong Kong)

Abstract

Conventional studies on the pricing of bus services use the cost structure to explain bus fares. In this paper, a hedonic pricing model for bus services in Hong Kong is estimated. The contributions of cost and market factors are uncovered. It is found that the cost factors dominate the determination of bus fares. In contrast to our expectation, bus fares do not react to competition faced by bus companies. Moreover, except the three cross-harbour tunnels, the bus fare has no direct relationship with the tolls of other tunnels. Our model serves well as a reference tool for bus companies to set market-acceptable bus fares.

Suggested Citation

  • Terence tai-leung Chong & Angela Fung & Wing-ting Lee & Ka-lai Man, 2009. "Hedonic pricing models for metropolitan bus services," Economics Bulletin, AccessEcon, vol. 29(2), pages 630-637.
    • Handle: RePEc:ebl:ecbull:eb-09-00143
    as

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    References listed on IDEAS

    as
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    3. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    4. Steven C. Bourassa & Vincent S. Peng, 1999. "Hedonic Prices and House Numbers: The Influence of Feng Shui," International Real Estate Review, Global Social Science Institute, vol. 2(1), pages 79-93.
    5. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    6. Terence Tai‐Leung Chong & Xin Du, 2008. "Hedonic Pricing Models For Vehicle Registration Marks," Pacific Economic Review, Wiley Blackwell, vol. 13(2), pages 259-276, May.
    7. Tabuchi Takatoshi, 1993. "Bottleneck Congestion and Modal Split," Journal of Urban Economics, Elsevier, vol. 34(3), pages 414-431, November.
    8. Judy Shaw-Er & Wang Chiang & Ya-Wen Chen, 2005. "Cost structure and technological change of local public transport: the Kaohsiung City Bus case," Applied Economics, Taylor & Francis Journals, vol. 37(12), pages 1399-1410.
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    More about this item

    Keywords

    Hedonic Pricing Model; Bus Fares; Kowloon Motor Bus.;
    All these keywords.

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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    Access and download statistics

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