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Regulatory reform and the congestion of urban railways

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  • Kidokoro, Yukihiro

Abstract

This paper examines various regulatory methods for congested urban railways. After building a closed spatial model with a congestible railway line, we conduct a numerical simulation of the impacts of the regulatory methods, using data on a typical railway firm in Japan. A closed spatial model in this paper enables us to evaluate the regulatory methods in terms of social welfare as well as to show a change in the typical performance of railways, such as the level of fares, railway capacity, and congestion. The simulation results show that implementing simple price-cap regulation, without properly addressing the congestion problem, makes railway firms operate efficiently, but substantially shrinks railway capacity and lowers social welfare. We then consider modified versions of price-cap regulation, which are consistent with relief of congestion.

Suggested Citation

  • Kidokoro, Yukihiro, 2006. "Regulatory reform and the congestion of urban railways," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(1), pages 52-73, January.
    • Handle: RePEc:eee:transa:v:40:y:2006:i:1:p:52-73
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    References listed on IDEAS

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    1. Yukihiro Kidokoro, 2004. "Cost-Benefit Analysis for Transport Networks: Theory and Application," Journal of Transport Economics and Policy, University of Bath, vol. 38(2), pages 275-307, May.
    2. Kidokoro, Yukihiro, 1998. "Rate of return regulation and rate base valuation," Regional Science and Urban Economics, Elsevier, vol. 28(5), pages 629-654, September.
    3. Ian W. H. Parry & Kenneth A. Small, 2005. "Does Britain or the United States Have the Right Gasoline Tax?," American Economic Review, American Economic Association, vol. 95(4), pages 1276-1289, September.
    4. Kanemoto, Yoshitsugu & Kiyono, Kazuharu, 1995. "Regulation of commuter railways and spatial development," Regional Science and Urban Economics, Elsevier, vol. 25(4), pages 377-394, August.
    5. Kidokoro, Y., 1997. "Rate-of-Return and Price-Cap Regulations for Urban Railways," ISER Discussion Paper 0449, Institute of Social and Economic Research, Osaka University.
    6. Kanemoto, Yoshitsugu, 1980. "Theories of urban externalities," MPRA Paper 24614, University Library of Munich, Germany.
    7. Liston, Catherine, 1993. "Price-Cap versus Rate-of-Return Regulation," Journal of Regulatory Economics, Springer, vol. 5(1), pages 25-48, March.
    8. Braeutigam, Ronald R & Panzar, John C, 1993. "Effects of the Change from Rate-of-Return to Price-Cap Regulation," American Economic Review, American Economic Association, vol. 83(2), pages 191-198, May.
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    Cited by:

    1. Junya Kumagai & Mihoko Wakamatsu & Shunsuke Managi, 2021. "Do commuters adapt to in-vehicle crowding on trains?," Transportation, Springer, vol. 48(5), pages 2357-2399, October.
    2. Kidokoro, Yukihiro, 2002. "The Effects of Regulatory Reform on Quality," Journal of the Japanese and International Economies, Elsevier, vol. 16(1), pages 135-146, March.

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