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The economics of regional railway regulation under vertical separation

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  • Scialà, Antonio
  • Stroffolini, Francesca

Abstract

We provide a model of local railway passengers service able to account for the main specific characteristics of the sector under vertical separation. Afterwards, we use this model to carry out both a normative analysis of the operators’ investment decisions and an assessment of the welfare effects of simple regulatory instruments. We show that, because of the information asymmetry of train operating company about the productivity of the infrastructure manager, the introduction of a regulatory instrument inducing the former to internalize the effect of her investment on the latter’s cost of providing access may be welfare reducing.

Suggested Citation

  • Scialà, Antonio & Stroffolini, Francesca, 2024. "The economics of regional railway regulation under vertical separation," Economics of Transportation, Elsevier, vol. 37(C).
    • Handle: RePEc:eee:ecotra:v:37:y:2024:i:c:s2212012224000030
    DOI: 10.1016/j.ecotra.2024.100344
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    References listed on IDEAS

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    More about this item

    Keywords

    Regulation; Railway; Vertical separation; Local public transport; Misalignment of incentives;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

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