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The Relevance of Scale and Scope Economies in the Provision of Urban and Intercity Bus Transport

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  • Marina Di Giacomo
  • Elisabetta Ottoz

Abstract

The relevance of scope economies is central in the unbundling of competitive tendering introduced for the assignment of franchised monopolies in LPT services, concerning either urban or intercity local transport. We present a number of different cost specifications. The separable quadratic and the composite models allow zero outputs to be directly handled and the data to be better fitted. Moderate global scope economies are found (around 2 per cent). By splitting global scope economies into its two components (fixed cost and cost complementarities savings), we find that fixed cost savings can be obtained from joint production. Density economies and scale economies are also detected. © 2010 LSE and the University of Bath

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  • Marina Di Giacomo & Elisabetta Ottoz, 2010. "The Relevance of Scale and Scope Economies in the Provision of Urban and Intercity Bus Transport," Journal of Transport Economics and Policy, University of Bath, vol. 44(2), pages 161-187, May.
    • Handle: RePEc:tpe:jtecpo:v:44:y:2010:i:2:p:161-187
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    Citations

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    Cited by:

    1. Cambini Carlo & Filippini Massimo & Piacenza Massimiliano & Vannoni Davide, 2011. "Corporatization and Firm Performance: Evidence from Publicly-Provided Local Utilities," Review of Law & Economics, De Gruyter, vol. 7(1), pages 191-213, July.
    2. Andrea Boitani & Marcella Nicolini & Carlo Scarpa, 2013. "Do competition and ownership matter? Evidence from local public transport in Europe," Applied Economics, Taylor & Francis Journals, vol. 45(11), pages 1419-1434, April.
    3. Park, Sun-Young & Lee, Kyoung-Sil & Yoo, Seung-Hoon, 2016. "Economies of scale in the Korean district heating system: A variable cost function approach," Energy Policy, Elsevier, vol. 88(C), pages 197-203.
    4. Bottasso, Anna & Conti, Maurizio & Vannoni, Davide, 2019. "Scale and (quasi) scope economies in airport technology. An application to UK airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 125(C), pages 150-164.
    5. Abrate, Graziano & Erbetta, Fabrizio & Fraquelli, Giovanni & Vannoni, Davide, 2016. "Bet big on doubles, bet smaller on triples. Exploring scope economies in multi-service passenger transport companies," Transport Policy, Elsevier, vol. 52(C), pages 81-88.
    6. Matthias Finger & Torben Holvad, 2013. "Setting the scene: background and overview of regulatory reform in the transport sector," Chapters, in: Mattias Finger & Torben Holvad (ed.), Regulating Transport in Europe, chapter 1, pages 1-35, Edward Elgar Publishing.
    7. Elisabetta Ottoz & Marina Di Giacomo, 2012. "Diversification strategies and scope economies: evidence from a sample of Italian regional bus transport providers," Applied Economics, Taylor & Francis Journals, vol. 44(22), pages 2867-2880, August.
    8. Mouwen, Arnoud & van Ommeren, Jos, 2016. "The effect of contract renewal and competitive tendering on public transport costs, subsidies and ridership," Transportation Research Part A: Policy and Practice, Elsevier, vol. 87(C), pages 78-89.
    9. Jan-Dirk Schmöcker & Tsuyoshi Hatori & David Watling, 2014. "Dynamic process model of mass effects on travel demand," Transportation, Springer, vol. 41(2), pages 279-304, March.
    10. Graziano Abrate & Fabrizio Erbetta & Giovanni Fraquelli & Davide Vannoni, 2014. "Cost function estimation of multi-service firms. Evidence from the passenger transport industry," Carlo Alberto Notebooks 380, Collegio Carlo Alberto.

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